The Bruce Golding-led administration and Gorstew Limited have formally signed an agreement for the Gordon "Butch" Stewart-led investment company to acquire the Government’s stake in the 360-room all-inclusive Sandals Whitehouse European Village and Spa Hotel located in Negril, Westmoreland to Sandals Whitehouse Management Limited for US$40 million.
The sale agreement, which was announced Wednesday afternoon by the directors of Ackendown Newton Development Company (ANDCO), confirms earlier reports that the purchase price comprised a US$7.5 million deposit which has already been made.
The purchase price also included a vendor’s mortgage of US$32.5 million that is repayable at an interest rate of 6% per annum over seven and a half years in 30 equal quarterly installments of interest and principal.
The sale will see Sandals Whitehouse Management Limited making all lease payments and other apportioned costs of insurance, property taxes due up to the date of completion.
In a press release issued on Wednesday, the DBJ and ANDCO said the US$32.5 million vendor’s mortgage is secured as follows: a fixed and floating debenture over the assets of Sandals Whitehouse Management Limited; a collateral mortgage over the real estate; the unconditional corporate guarantee of Gorstew Limited; and maintenance of a Debt Service Reserve Account by way of a cash deposit of US$1.3 million (equivalent to three months debt service) to be held in escrow for the benefit of ANDCO.
Sandals Whitehouse Management to make all lease payments
The release added that "under the terms of the sale agreement, upon completion of the sale which is projected as at March 24, the lease will be surrendered with Sandals Whitehouse Management Limited making all lease payments, and other apportioned costs of insurance, property taxes etc., due up to the date of completion."
In addition, Gorstew Limited will also transfer its shares in the capital of ANDCO to the UDC and the DBJ.
The release added that simultaneous with the signing of the sale agreement, all the parties to the ongoing claim in the Supreme Court and Arbitration (which include Gorstew Limited, Sandals Whitehouse Management Limited, ANDCO, the Urban Development Corporation, and the Development Bank of Jamaica) have also executed a deed of settlement agreeing to the discontinuance of all claims and counterclaims.
ANDCO is a joint venture company formed by the UDC, Gorstew Limited and the DBJ, which owns the Sandals Whitehouse Hotel.
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