Fiji resort investors due $1.5m, report says

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A receivership report on the Fiji Beach Resort & Spa says 241 investors are owed $1.5 million.

It also shows a Fiji state authority owes the investors and two businesses in receivership $1.5 million.

A group of 141 New Zealanders, 52 Australians, 16 Americans, 30 people living in Fiji, one from Dubai and one from Canada poured millions into the resort developed by Neville Mahon of Greenlane in Auckland.

The Fiji Beach Resort & Spa, managed by Hilton, continues to operate 274 rooms but investors are owed a year's payments after a series of problems.

KordaMentha's Grant Graham and Brendon Gibson say a preliminarily calculation showed investors were owed FJ$2.1 million ($1.5 million).

"With no sums available the receivers are not in a position to make catch-up payments in relation to the pre-receivership period. The serious matter of outstanding villa-owner revenue is acknowledged and recognised," they wrote.

Daily room rates at the Denarau resort were also sinking from FJ$350 a while ago to FJ$206 "due to political instability, negative press, the January floods and increased villa owner usage", the receivers said.

Villa owners also want to establish a new management structure and are worried the Hilton is not trading to maximise their returns.

On September 8, the receivers were appointed to the resort's developer and manager Denarau International and Denarau Investments.

On the brighter side of the ledger, the receivers say the Fiji Islands Revenue and Customs Authority owes FJ$2.1 million ($1.5 million). The state authority owes the two Denarau companies about FJ$2 million and the investors FJ$175,136.

The receivers met the authority last month and plan to get the money back.

"Recovery of these sums is of prime importance to the receivership and naturally to those villa owners owed sums of money," they said.

Stage two of the resort could also be finished. That involves villa blocks 62-68, a new bistro and pool, finishing infrastructure and services, Hilton's requirements for back-of-house extensions and equipment and other costs.

"Our preliminary view is that the works will be completed during the receivership," the receivers said.

Hilton had indicated problems paying villa owners, primarily because of falling average room rates last year. Payments to trade creditors were delayed and payments to Hilton for management fees were not settled in full.

The outlook is no brighter because Fiji now enters its low tourist season.

Investors will get another update on November 30 and that will deal with the receivership, capital works and timetables and the chance of their getting returns next year.

ISLAND WOES
* Fiji Beach Resort & Spa is managed by Hilton.
* Kiwis poured millions into villas but have gone without payments for a year.
* Receivers entered the resort on September 8.
* They issued a 10-page update on the situation.
* The next report is due out on November 30.