Vacation to spend $2M

Press, 28 May 1981, Page 18

Vacation to spend $2M

Vacation Hotels, Ltd, is planning to spend about $2 million on upgrading and enlarging its Christchurch hotel, the chairman (Mr J. T. Sheffield) announced yesterdav.

The announcement’ came as part of a package on plans for an accelerated expansion of the group, after the claim that the future of the company had been stabilised with major new shareholders. The Vacation hotel in Christchurch' was not up to the standard of the type of hotels seen in Christchurch, and planning was being made to upgrade the standard to a better class of hotel than at present, he said.

The engineers and architects had been instructed on Tuesday to see what could be done to upgrade the hotel. The entrance foyer and public areas of the hotel were “poor,” Mr Sheffield said; The developments were subject to planning and city council approval, but it was hoped to be able to add an extra deck to the car park

and make the public areas much larger. Not much money had been spent on the interior of the hotel while Vacation had been the tenant, but subject to the legal agreement being settled, the group would be the owner from June 30, Mr Sheffield said. After the initial developments Vacation would endeavour to do something about bedrooms, particularly in improving soundproofing, he said.

According to? the Press Association other plans included a heavy borrowing programme to bring forward the completion of the rebuilding of its Brent’s Rotorua hotel in 1983. Extra expenditure of almost SIOM will be required to accelerate the Rotorua development.

In addition, Vacation was working with Somerville Properties, of Singapore, Ltd, in the plans to greatly expand the Auckland InterContinental Hotel which could involve the Singaporean syndicate spending up to S2OM, Mr Sheffield said.

The composition of a new Vacation board after Somerville’s purchase of a 22.65 per cent holding and the acquisition by Alex Harvey Industries, Ltd, of the 51 per cent formerly held by the Fletcher group, was also announced by Mr Sheffield. Three top executives of AHI join as directors. They are the AHI chairman, Mr H. N. Avery, its managing director, Mr C. M. Cairns, and former All Black captain, Mr Wilson Whineray, who is in charge of several of AHI tourist investments, including Turoa skifield. The nominee representative of Somerville .is Mr Colin Hunt, a consultant attached to its Sydney Hyatt Kingsgate investment who handled the sale of the InterContinental this month. Mr Sheffield remains as chairman of Vacation and Mr R. A. Henderson continues as managing director. One .other existing director also remains — Mr R. B. Grierson, who is deputy chairman as well as a director on the Air New Zealand board.

Somerville’s purchases have yet to be approved by the Overseas Investment Commission and the Examiner of Commercial Practices.

Although overseas ownership could limit Vacation plans to borrow on the local market, Mr Sheffield said Somerville left no doubt that it could find overseas funding if this was required to meet the expansion.

Vacation is preparing a borrowing programme which it hopes will provide up to S7M locally to fund completion of Brents. This has included discussions with the Development Finance Corporation. About SI.3M could be provided from Vacation’s own cash flow.

It expects an announcement on funding will be made early next month.