After receiving notice that owners JSN Development Group plan to sever their management agreement for Hodges Bay Resort & Spa in Antigua, officials with Elegant Hotels Group PLC said they plan to “dispute the validity of this termination notice.”
July 9, 2019--The Board of Elegant Hotels Group plc ("Elegant Hotels", the "Company" or the "Group"), the owner and operator of seven upscale freehold hotels and a beachfront restaurant on the island of Barbados, today announces an update in relation to Hodges Bay Resort & Spa in Antigua ("Hodges Bay").
Hodges Bay, which was originally due to open in July 2017, remains incomplete due to ongoing issues with the construction of the property, which are outside of Elegant Hotels' control. However, Hodges Bay was being operated by Elegant Hotels on a partially open basis.
The Company confirms that, although the operating term of the management contract has not commenced, it has now received a termination notice in relation to the management contract. The Company disputes the validity of this termination notice and intends to take all action necessary to preserve shareholder value.
The Company can confirm that it has approximately $1.7m of balances outstanding in relation to Hodges Bay; being $1.5m in the form of a loan to the Hodges Bay management company, and $0.2m of unpaid technical service fees. Under the terms of the management contract, the loan is now immediately repayable to the Company following receipt of the termination notice.
The Group's outlook for FY2019 and FY2020 remains unchanged.
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