YGL reports decline in net loss

Tuesday May 01, 2007 (from Fiji Live)

Listed company, Yaqara Group Limited has reported a net loss after tax of $1.08 million for the financial year ended March 31, 2007, down from $1.82m the previous year.

Company managing director Lyndon Driscoll says the financial year ending March 2007 has been one of challenge and positive consolidation for the company.

"During the period the company has focused on reduction of total profit and loss expenses, the raising of further working capital from international sources and identification of first stage projects and participants," Driscoll says.

He says that total profit and loss expenses (operating, administration and finance costs) have been reduced by $1.38m, from $2.59m to $1.20m, which represents a reduction of 53.36 per cent.

The net asset position of the company is reported at $22.34m.

Driscoll says the year was characterised by considerable uncertainties in the Fiji domestic economic and political framework which had a significant impact on the company’s ability to successfully source both local and international working capital in a timely manner.

However, the company has been able to enter into contractual arrangements with Resorts and Properties International Limited (RPI), an Australian development company with international celebrity and businesswoman Ivana Trump as a shareholder and promoter.

This was for the RPI to secure, subject to shareholder approval, a 25 per cent interest in Yaqara Group Limited and the sub lease to RPI of two waterfront sites for development of two 200-room hotels at the Yaqara Studio City site, he said.

Driscoll says RPI is a special purpose hotel development and management company, founded by Australian businessman and developer John Stavrou, to be listed on the Australian Stock Exchange (ASX) via an Initial Public Offering (IPO) in June/July 2007.

He said the board and management of RPI will provide a high level of international experience and expertise across property, technology, hotel and resort development, management and marketing.

Under the agreement reached with RPI, subject to shareholder and regulatory approval, RPI will purchase a 25 per cent equity interest in YGL via a share placement for a total of F$6.76m made up of F$4.05m in cash and F$2.71m in shares in RPI at initial offer price of A$1 per share.

YGL will supply sealed road access and services to the hotel sites and RPI will contribute F$2.5m to YGL infrastructure funding under agreed financing arrangements and will contribute to rates for internal road usage and its proportion of maintenance, replacement and operation of certain infrastructure equipment, Driscoll says.

"It is intended that YGL will provide a seat on the board to RPI and a provision for an alternate."

The total effective working capital to the company from the arrangements with RPI is in excess of F$10.5m, calculated as F$6.7m from the share issue, plus F$2.5m in infrastructure funding plus F$1.5m from intended hotel site land sales. Driscoll says that while planning work for the two hotels at Yaqara will start immediately following the IPO, it is intended that construction will commence in 2009.

YGL intends to begin work on site for provision of infrastructure in 2008. The total cost for the two intended ‘Ivana’ hotels to be built at Yaqara will be in excess of F$100 million, and will be funded entirely from offshore capital brought into Fiji, Driscoll maintains.

He says the arrangements also give the company a platform on which to build and to accelerate the other diverse elements of the overall Yaqara Studio City development.