Wednesday 18 March 2009

Newfound in Risk of Collapse

Jayne McGivern has resigned as CEO of AIM-listed resort developer, Newfound, as the company warned of a risk of collapse, according to a report in Property Week Magazine

McGivern will be best known for being at the helm when Newfound called time on its involvement with the Humber Valley Resort in Newfoundland, Canada. 

Newfound, which now concentrates on its developments in the Caribbean, said that McGivren’s departure was a result of it restructuring of its operations and management to cut costs. At the time the company warned that, without new funds, it would have to ‘cease operations’.

The Property Week piece quotes Newfound as saying: ‘Unless new finance can be found for the group over the coming months, there is a risk that the Company will exhaust its cash resources, in which case it will need to cease operations.’

Further information from the article:

McGivern, a former Multiplex UK chief executive who took over last year, will remain on the board of the company but is to be replaced as CEO by Stephen Bentley, who is currently the finance director.

The day-to-day management of the company will be outsourced to a management company, and then Bentley will step down from his role as CEO and finance director to become a non-executive director.

Richard Foley has also resigned as a director, but will remain an employee of the group overseeing Newfound’s Caribbean projects.

John Morgan, acting chairman of Newfound, said: 'It is clear in the current financial market that property development companies are struggling to raise capital to fund projects. Newfound is no exception to this and the board has decided that the company needs to restructure its operations and executive management to reduce its expenditure.'


Crazy About Newfoundland reports that McGivern is understood to be teaming up with Mikola Wilson to launch an opportunity fund. Wilson runs niche investment firm Seven Dials Fund Management. The new fund is expected to target high-yielding, income-producing assets with latent development potential and is also being mooted to take over the day-to-day management of Newfound.

Meanwhile, over at Humber Valley Resort there are signs that the 'green shoots of recovery' may be in the air. The Crazy About Newfoundland blog reports that there are two bidders vying for the assets of the resort.

The blog reports that "A management group led by a chalet owner has confirmed it has made a bid to buy Humber Valley Resort’s assets."

"The deadline for the tender call for the bankrupt resort’s properties — including the golf course, restaurants, land and other holdings — closed Friday, and the resort’s trustee in bankruptcy now has until March 16 to decide what to do with the bids. The trustee, Ernst and Young, won’t say how many bids have been received, but a bid has been made by a group led by Brian Dobbin, the man who founded the resort that went into bankruptcy in December."

"At least one other bid has also been made. A management group that includes Mike Ward and some other owners, in a prepared statement to The Western Star Tuesday, said its plan recognizes the “misguided focus” and the problems of the previous management teams, and knows what is needed to turn the resort around."

The full blog is available here

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