Tower Hotel receivership may be brought to an end By Gitanjali Singh
Stabroek News
September 2, 2002

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The Bank of Nova Scotia and the directors of Tower Hotel are considering bringing the receivership of the hotel to an end with the aim of injecting new funds and embarking on a major marketing initiative.

Recently appointed chairman of the hotel, David King, said it was now in a position to stand on its own if there was an injection of fresh capital to help offset some of the debt owed to the Bank of Nova Scotia (BNS) and new management. Seventy per cent of the amount to be raised is expected to go to liquidate the debt to BNS.

The directors of the hotel are working with the bank on getting the company out of receivership and to have investors for the entity. King said the business plan and prospectus for raising an estimated $250M should be finalised shortly.

The shareholders of the hotel, in recent months, met and agreed to amend the articles of the company to allow it to become a public company.

The majority interest in the hotel is held by the Humphrey Group. King said a number of persons have expressed interest in taking up equity in the hotel but he could not discuss the nature of those discussions, which are confidential.

Sam Lord’s Castle Resort of Barbados recently signed a memorandum of understanding with Hotel Tower on dual destination procedures and cooperative marketing and information technology strategies. King said he hoped the resort would be interested in investing in the Hotel Tower.

He said that the new management would be responsible for developing this strategic alliance with Sam Lord’s Castle, a 248-room hotel with a large clientele base.

While investors are not falling over themselves to invest in Guyana, King feels that Hotel Tower holds out excellent potential as a possible investment as the hotel now is in a very different state from when it went into receivership some three years ago.

The hotel has moved from a loss making situation to making operational profits and it has doubled its available rooms by over 100% from 30 rooms three years ago to around 62 rooms currently.

“The hotel has changed dramatically from three years ago. All it needs now is an injection of capital to liquidate its debt and management to run the hotel out of receivership,” King said.

He noted that the functional areas of the hotel had increased with the Main Street Café open 24 hours a day and the hotel operating a host of new boutiques, a business centre and a salon. The room occupancy rates are also quite satisfactory.

Hotel Tower Ltd went into receivership on April 12, 1999 and currently pays some $3.5 million monthly to the bank. The company operates on a positive cash flow basis.