Newfound NV announced on November 8 that it has been unable to secure US$21 million in working capital for the company's Newfoundland operation at Humber Valley.
Newfound will now attempt to raise five million pounds sterling through a new issue of shares to existing directors "at a significant discount to market price".
Newfound reported in late September that it was "in the process of finalising" the financing for it's Humber Valley Resort. The company also reported a pretax US$7.4 million loss in the first half of 2007 compared to a US$1.8 million profit the previous year. Newfound's current trading information may be found at several spots including google financial reports.
None of these news releases is contained in the publicly accessible "press room" portion of the company website. They may be located in the "investor relations" section, however, a prominent legal warning requires a viewer to confirm that they do not reside in one of several jurisdictions - including Canada - before proceeding to other pages. Oddly, the warning page is posted through flash animation and cannot be copied. Likewise, the navigation links blocked the page path and thereby preventing posting a link to even the page containing the warning.
According to Thomson Financial, Newfound's September 26 statement indicated the company was also seeking financing of US$30 million for its St. Kitts and Nevis development. In May 2006, Newfound purchased land in St. Kitts and Nevis for the development of a resort to include a 150-room hotel, 400 "upscale" villas and an 18-hole golf course. Reported cost was US$21 million.
In the photo at right, Newfound corporate vice president and attorney Derrick White is shown presenting a cheque for US$10 million to Premier Vance Amory as part of the land purchase.
Two years ago, St. Kitts and Nevis prime minister Dr. Denzil Douglas told carribeannetnews.com:
“Even in Frigate Bay, which is now virtually built out, the Newfound Group out of Canada, in conjunction with National Bank, TDC and Rams, is pursuing a major hotel and condominium project; and the Frigate Bay Development Corporation is in the process of constructing a very impressive villa and commercial development project that will significantly enhance the tourism-related amenities in Potato Bay and the surrounding areas,” said Prime Minister Douglas. [Emphasis added]
The project was renegotiated earlier this year:
According to Parry, the initial agreement between the Developers and the former CCM Administration was renegotiated to reflect a reduction of 10 years tax holiday from the initial 30 year period under the old contract to 20 in line with the regular arrangements of that nature here.
The new agreement also reflected the recovery of over 172 acres of land in addition to the historical sights (which had not been mentioned in the previous proposal), for the people of Nevis in exchange for a reduction of the purchase price from $21 million to $19 million.
“What this means is that as the value of these lands increase and improves in value and there are capital gains, we (Nevis) would benefit to the point where we will end up having millions of dollars for the continuing development of Nevis.
“I wish to make this point as well, we (Nevisians) were told that the cost of the lands was $10 million but when you are building, the cost of the loan to cover the 10 million you are really paying $18 million and we would have only benefited to the tune of $3million. So now we are talking about millions of dollars because of this deal that the Nevis Island Government will have for future development of the island,” he said.
The project is now reported to commence construction in 2008, but had been originally touted as beginning in January 2006 with estimated completion in March 2007.
[h/t to Gary Kelly and crazyaboutnewfoundland.com]
-srbp-
