The Fiji National Provident Fund (FNPF), through its wholly-owned subsidiary FNPF Investments Limited (FIL), will write back assets worth $33.5 million for the financial year ending 30 June 2011.
FNPF Chief Executive Officer Mr Aisake Taito said the write-back is the outcome of two major investment rehabilitation projects – the revaluation of Natadola Intercontinental Hotel and the sale of majority shares in Grand Pacific Hotel Limited.
“Whilst we had anticipated that the investment recovery will take some time, it is encouraging to see positive results within the first year of the investment rehabilitation work under the FNPF Reforms,” Mr Taito said.
As required by the international financial reporting standards the valuation of the Natadola Intercontinental Hotel, golf course and residential development was conducted by two international valuers. These were the same valuers engaged by the Fund in 2009. Both valuers have increased their valuations of the Natadola projects by 23%.
“The Intercontinental Hotel is performing well with strong occupancy and steady rates. This has led to its strong cash-flow position, which together with better forecasts, were the main drivers for the increase in valuations,” Mr. Taito said. The increase in valuation has resulted in the write back of $29 million.
In addition, other rehabilitation works including the rationalization and transfer of all leases to Natadola Bay Resorts Limited, the capital restructure and documentation of the new active loan that will now be serviced, and the work associated with the residential development have all contributed to the positive outlook for the project.
In August 2011, the hotel commenced servicing the first $100 million tranche of its debt to FNPF after it had repaid the $3 million debt facility in the 2011 financial year.
The residential development at Natadola is the other area where the Fund will recover its investment, and the detailed Master Plan is close to completion for the first residential area to be developed,” said Mr. Taito.
Final pricing is still under review however it is expected that the first portion of the residential area will be available to the market before the end of the year.
Mr. Taito said that the hotel valuation is conservative as it is based on only a year of track record.
“The hotel met its operating budget for last year and is on track to exceed budget for the current calendar year and the valuation will increase significantly if the hotel continues to meet the current and projected budgets in place for the next five years,” he added.
The FNPF has also sold 75% of its shares in the Grand Pacific Hotel Limited to its new joint venture partners from Papua New Guinea – the National Superannuation Fund and Lamana Development Group.
“FNPF has recovered $4.5m from what was written down earlier in 2009 and the value of our 25% shareholding in the new project should increase in future,” said Mr. Taito.
According to Mr. Taito the rehabilitation work for GPH was a two-staged process. The first is the partial sale of the shares to our joint venture partners and second is the redevelopment work for the new hotel which will commence soon. He said that the outcome of the investment achievements is in addition to the other major reforms currently undertaken by the Fund.
Mr Taito has assured members that Board and Management will continue to work in the best interest of all members in protecting their hard-earned savings.
The FNPF accounts for FY2011 will be released by the end of October.
FNPF Chief Executive Officer Mr Aisake Taito said the write-back is the outcome of two major investment rehabilitation projects – the revaluation of Natadola Intercontinental Hotel and the sale of majority shares in Grand Pacific Hotel Limited.
“Whilst we had anticipated that the investment recovery will take some time, it is encouraging to see positive results within the first year of the investment rehabilitation work under the FNPF Reforms,” Mr Taito said.
As required by the international financial reporting standards the valuation of the Natadola Intercontinental Hotel, golf course and residential development was conducted by two international valuers. These were the same valuers engaged by the Fund in 2009. Both valuers have increased their valuations of the Natadola projects by 23%.
“The Intercontinental Hotel is performing well with strong occupancy and steady rates. This has led to its strong cash-flow position, which together with better forecasts, were the main drivers for the increase in valuations,” Mr. Taito said. The increase in valuation has resulted in the write back of $29 million.
In addition, other rehabilitation works including the rationalization and transfer of all leases to Natadola Bay Resorts Limited, the capital restructure and documentation of the new active loan that will now be serviced, and the work associated with the residential development have all contributed to the positive outlook for the project.
In August 2011, the hotel commenced servicing the first $100 million tranche of its debt to FNPF after it had repaid the $3 million debt facility in the 2011 financial year.
The residential development at Natadola is the other area where the Fund will recover its investment, and the detailed Master Plan is close to completion for the first residential area to be developed,” said Mr. Taito.
Final pricing is still under review however it is expected that the first portion of the residential area will be available to the market before the end of the year.
Mr. Taito said that the hotel valuation is conservative as it is based on only a year of track record.
“The hotel met its operating budget for last year and is on track to exceed budget for the current calendar year and the valuation will increase significantly if the hotel continues to meet the current and projected budgets in place for the next five years,” he added.
The FNPF has also sold 75% of its shares in the Grand Pacific Hotel Limited to its new joint venture partners from Papua New Guinea – the National Superannuation Fund and Lamana Development Group.
“FNPF has recovered $4.5m from what was written down earlier in 2009 and the value of our 25% shareholding in the new project should increase in future,” said Mr. Taito.
According to Mr. Taito the rehabilitation work for GPH was a two-staged process. The first is the partial sale of the shares to our joint venture partners and second is the redevelopment work for the new hotel which will commence soon. He said that the outcome of the investment achievements is in addition to the other major reforms currently undertaken by the Fund.
Mr Taito has assured members that Board and Management will continue to work in the best interest of all members in protecting their hard-earned savings.
The FNPF accounts for FY2011 will be released by the end of October.