“Rehabilitation” of loans by FNPF to Natadola Bay Resort
October 25, 2011 1 Comment
The Fiji Times has reported the “rehabilitation” of the loans by the FNPF to Natadola Bay Resort Limited. The report is based on the FNPF 2011 Annual report, which has not yet appeared on the FNPF website. It may be that this doesn’t make sense because the censors cut parts of the report. If anyone understands the background to this, your comments would be welcomed.
“THE Natadola Bay Resort Limited will pay $100million of its $302.8m loan over $26.5 years but the remaining balance of $202.8m has an indefinite loan term and is interest free.
The Fiji National Provident Fund, which owns the property revealed this in its 2011 annual report. Along with some of the fund’s other investment projects, the NBRL debt was rehabilitated following a write down of $301m on the property in 2009. The hotel, which was constructed at a cost of $385m was valued at $84m resulting in the write down.
The fund this year wrote back $29m on the property after a revaluation of the property.
The fund’s hope in recovering its funds in the project lies in the second stage of the resort development, which is the sale of the residential lots.
The NBRL debt was restructured into three loans, according to the report.
Loan 1, worth $60 million would be paid over 26 years at an interest rate of 8 per cent.
In the first 12 months, the hotel would only pay interest and from August 1, 2012, it would then start paying the principal plus interest.
Loan 2, worth $40m would be paid over 26.5 years with an interest rate of 8 per cent.
The hotel would pay interest only for the first 18 months and start paying the interest plus the principal from February 1, 2013.
Loan 3, worth $202,830,111 is interest free and has an “indefinite” loan term.
“All surpluses from the Natadola Residential Development shall be applied against the outstanding balance,” the report said.
“All cash surpluses that are not required by NBRL for expenses other than the normal course of the business shall be applied to the outstanding balance.”
The fund however has the right to commence charging interest and capitalising against the balance outstanding at any time in the future.
The fund’s financial year starts on July 1 and ends on June 30.”