Whitehouse deal signed!
Published:Thursday | February 10, 2011 | 12:00 AM
The Government has gone ahead with the planned sale of the Sandals Whitehouse hotel in Westmoreland, despite the myriad of concerns raised by the Office of the Contractor General (OCG)
A formal sale agreement has now been signed with the deal expected to be finalised by March 24.
The OCG had expressed concern about several aspects of the deal and urged the Government to put the planned sale on hold until a full investigation was done.
But yesterday, the company which owned the hotel, Ackendown Newtown Development Company (ANDCO), and the Gordon 'Butch' Stewart-led Gorstew Limited announced that they have executed an agreement for sale of the hotel to Sandals Whitehouse Management Limited for the agreed US$40 million.
Legal dispute ended
The signing of the agreement also signals an end to the legal dispute which had raged between Gorstew and its partners in the development.
The purchase price includes a deposit of US$7.5 million from Sandals Whitehouse Management. This has already been paid.
The rest of the purchase price is a vendor's mortgage of US$32.5 million that the parties say is repayable at an interest rate of six per cent per annum over seven and a half years in 30 equal quarterly instalments.
According to ANDCO, the vendor's mortgage is secured by 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 the maintenance of a debt service reserve account of a cash deposit of US$1.3 million to be held in escrow for the benefit of ANDCO.
Under the terms of the sale agreement, once the deal is done, Sandals Whitehouse Management will be responsible for all lease payments, and other apportioned costs of insurance, property taxes and other payments.
In addition, Gorstew Limited will also transfer its shares in the capital of ANDCO to the Urban Development Corporation (UDC) and the Development Bank of Jamaica.
ANDCO is a joint venture company formed by the UDC, Gorstew Limited and the DBJ, which owns the 360-room all-inclusive Sandals Whitehouse European Village and Spa hotel located in Westmoreland.