Commodore hotels sale ‘very close’

Press, 15 October 1976, Page 1

Commodore hotels sale ‘very close’

The sale of the three Chateau Commodore hotels to the Nauru Phosphate Royalties Trust might be concluded within two weeks. Intense negotiations have taken place in Fiji this week between the President of Nauru (Mr Hammer DeRoburt) and Mr Peter Love, the marketing expert for Merbank, the Auckland merchant bank that financed the construction of the hotels.

“There is no finality yet, but we are getting very close,” said Mr Love in Suva last evening. Asked if he thought the agreement would be signed in the next 24 hours Mr Love said: “That is the 64,000 dollar question—it could still be a couple of weeks away.”

Mr Deßoburt has been in Fiji for the South Pacific forum on the Law of the Sea. On Wednesday he instructed his financial adviser, Dr Allan Crowcott, who is also Secretary for Island Development and Industry in Nauru, to fly to Fiji for the negotiations with Mr Love. The three men met most of yesterday, and continued their discussions over dinner last evening. Mr Love said he was “very confident” that an agreement would be reached.

“Although nothing will be concluded this week, we will at least have tidied up the parameters,” said Mr Love.

Dr CroWcott is expected to fly to Australia this week to report progress on the talks to the trust in Melbourne.

A meeting of the creditors of H. P. Holt, Ltd, the

construction firm that built the hotels, was told yesterday that negotiations were progressing well in Fiji, and that there was every chance for a settlement.

One of the important details of the sale is whether a leasing agreement will be included in the final arrangement. The Phosphate Trust is looking to invest its wealth, and has no wish to manage the three hotels in Christchurch, Blenheim, and Timaru. The trust originally was reported by Merbank to have agreed to buy the hotels, subject to a leasing agreement. It might now conclude the sale before such an agreement is completed. At present the hotels are under the management of Commodore Proprietary, Ltd, a Melbourne-based group which was one of the original shareholders in the company formed to build the hotels. The group has a 15-year contract to manage the hotels, and there is already uncertainty over the claims it is making for thousands of dollars in management fees.

Although both the Tourist Hotel Corporation and

Travelodge, Ltd, have expressed interest in leasing the hotels, the Australian group would be the logical choice if a swift agreement were sought.

Mr M. B. Restall told the creditors yesterday that he had personally confirmed that Commodore Pty was very interested in retaining the management if the hotels were sold to the Nauruans. Mr Love said that there was no question of Nauru’s wanting to run the hotel and he was confident that the Nauruans would retain the present management.

The creditors voted unanimously to ask the Supreme Court today to adjourn once again the complicated writs and counter-writs over the hotels. The writs have come before the Court many times, only to be adjourned because the Court has been told that the sale of the hotels is “imminent.” This time an adjournment to the middle of December will be sought. Another reason for seeking an adjournment is that two of the parties intend to take matters to the Court of Appeal before the main actions begin.