WILFRED Baghaloo, managing director, Deals, at Pricewaterhouse Tax and Advisory Services Ltd indicated Monday that it is likely the 60-room Morgan’s Harbour Hotel near historic Port Royal will be placed on the market for sale in the first quarter of 2016.

The possibility arises from a court decision on Tuesday, December 8 made in the Supreme Court and secured by current lessees and operators Lashmont Financial Services Ltd, against Morgan’s Harbour Ltd in which Neville Blythe is chairman.

On Wednesday, 23 September 2015, Lashmont appointed Baghaloo and Caydion Campbell of PricewaterhouseCoopers (PwC) as joint receiver-manager of Morgan’s Harbour Ltd in default under a debenture held by Lashmont, Baghaloo told the

Jamaica Observer.

The Court refused an application for an interim injunction by Morgan’s Harbour Ltd which would have seen a suspension of the receivership.

Morgan’s Harbour Ltd said in its application that it was initially offered $212 million for purchase of the hotel by Lashmont, this in addition to $263 million to settle debt owed by the company.

However, it was noted in the claim, the Development Bank – which is the principal debtor – objected to the arrangement as it did not give priority to payment debt owed to it. But Lashmont, alternatively, secured debt owed by Blythe to the Development Bank of Jamaica (DBJ).

Morgan’s Harbour was acquired by Blythe in 2004 through Guardian Investment Limited and UGI Group Ltd.

In 2014, he leased the hotel to Lashmont Financial. The hotel was renamed the Grand Port Royal Marina and Spa and the lessees outlined plans to spend in the region of $60 million to refurbish and reposition the property.

The lease was reported to have been secured with an option to purchase from Blythe.

The application for the interim injunction was brought by Morgan’s Harbour Ltd acting through its Chairman Neville Blythe. The respondents were: first respondent Myles McClymont; second respondent Lashmont Financial Services Ltd and third and fourth respondents Wilfred Baghaloo and Caydion Campbell.

The

Business Observer understands that some $70 million plus interest was owed to the DBJ in relation to the property. Queries sent to the DBJ to determine the purchase price of the debenture were not answered up to press time.

Morgan’s Harbour Ltd applied for the injunction, but on December 8, Justice Bryan Sykes gave a decision denying the request.

Morgan’s Harbour Ltd, before Justice Sykes, had contended amongst other things that the debenture under which the receivers were appointed was “irregularly acquired” by Lashmont from the DBJ because a lease agreement between Morgan’s Harbour Ltd and Lashmont precluded Lashmont from buying the debenture from DBJ.

Lawyers for the defendants said there were “no expressed or implied terms in the lease agreement to assist the applicant’s assertion that Lashmont was precluded from acquiring the debenture”.

Morgan’s Harbour – which has a long history of ownership changes and challenges – sits on four acres of land leased from the Government of Jamaica.

The hotel now has 60 rooms of which about 30 are usable. In total, the company has leased 20 acres of land from the Government with the hotel occupying four acres.

The hotel now markets itself as a preferred destination for yacht travellers, offering space in its marina.

Baghaloo, as receiver, stated “our plan is to continue with the existing operator for a limited period while preparing the assets for a public sale”. It is expected that the public sale will commence in the first quarter of this year.

Lashmont is owned by the first defendant and his family. They are said to be Jamaicans who own businesses in England.

The PwC director said that Lashmont, through the receivership, will be selling the assets as an exit strategy.

Calls to Neville Blythe by the

Business Observer for comment were not answered.