50% stake sold in golf resort hotel

Gordon Berry, The Courier, 27 September 2004

The £58 million St Andrews Bay Golf Resort and Spa is at the centre of a major refinancing deal that has seen a 50% stake sold by founder Dr Don Panoz.

The new part-owner of the resort, which was built in the wake of a lengthy and intensive planning and conservation debate, is Henk Evers, who has also taken a share in the sister Chateau Elan golf resort and winery in Atlanta, Georgia.

The £56 million deal has been struck as newly published accounts for the hotel’s near two-year spell of trading to March, 2003, show debts of around £60 million and accumulated losses of over £7 million.

It was claimed at the weekend, however, that the resort has been “built from nothing” in only three years, and that for 2004 it will break even after accounting for increased capital investment.

At present the major creditors are the Bank of Scotland and St Andrews Bay Development Ltd’s parent company, Fountainhead Holdings Ltd, which is incorporated in Bermuda.

The resort, opened in 2001, includes a 209-bedroom hotel, luxury lodge accommodation, a spa, conference centre, two championship golf courses and a clubhouse. It has more than 300 employees and prides itself on an exceptional level of service.

Before taking on his share of the business Mr Evers acted as president and chief executive. He was also a director along with Dr Panoz, his wife Nancy Panoz, and Anthony Mastandrea.

In the annual directors’ report for the accounts for the year to March 31, 2003, Mr Evers said that they reflected the “challenging trading conditions” that existed throughout the period.

The opening of the hotel was closely followed by the September 11 atrocities in America, and the tourist trade also had to contend with the nationwide foot-and-mouth outbreak.

The consequent substantial drop in the numbers of overseas visitors - particularly those from the lucrative north American golfing market - had a sizeable impact on tourism in Scotland.

There has recently been an indication that the Americans are beginning to return to the area, a trend welcomed by the chief executive of the Kingdom of Fife Tourist Board.

Mr Evers said yesterday that there would be “business as usual” at the resort, and that his first role as joint partner had been to confirm the completion of a £500,000 investment in a new 60-cover Mediterranean restaurant, and installation of a £350,000 cart path on the Devlin Course.

He said the hotel had received widespread acclaim as a leading conference, golf and leisure resort, and it had an impressive client base of leading worldwide companies.

Mr Evers said he had worked alongside Dr Panoz for over 10 years, and that the deal was a once in a lifetime opportunity.

“Don will become 70 next year, and he said to me ‘the clock doesn’t lie’ and presented me with the opportunity to become a joint partner with him and Nancy in these two wonderful opportunities. Don rightly wants to enjoy a more relaxed lifestyle.

“I’ve had the challenge of building St Andrews Bay and developing Chateau Elan, so it was logical for me to put my own backing behind what I had helped to create.

“There will now be a greater opportunity to recognise the senior management’s input in helping to build a quality resort from nothing in only three years,” he said.

In the last two years, Mr Evers said, there had been profit before exceptional items. In 2004 the resort would break even, after accounting for capital investment.