Reef Resort Limited sold, 135-room hotel to be constructed | 13 July 2019
The Ministry of Habitat, Infrastructure and Land Transport (MHILT) has confirmed that following the cabinet of minister’s approval, sanction has been granted to two non-Seychellois companies to purchase all the shares in Reef Resort Limited.
In a press conference held yesterday afternoon at Liberty House, Minister Pamela Charlette of MHILT, the Minister for Finance, Trade, Investment and Economic Planning Maurice Loustau-Lalanne and chief executive of Seychelles Investment Bureau Cindy Vidot stated that First Invest Limited, a company incorporated in the United Arab Emirates (UAE) as an International Business Company has acquired 76 shares in Reef Resort Limited from Kingfisher 2 Limited for the consideration of $4,563,800. The beneficial owner of First Invest Limited is Mauritian National Dr Krishnan Kumar Malhotra.
The second company to purchase the remaining 24 shares for the total consideration of $1,441,200 is Deramann Limited, a domestic company registered in Port-Louis Mauritius and for which the sole shareholder and director is Dr Jadoo Hermann Dookun, also a Mauritian national.
“The deal is for $6 million, that is what the new promoter is paying to Beachcomber. The government will collect $300,000 as stamp duty on the transaction and the promoter wants to develop a hotel on the site. The site has always been for touristic development and in their project, they are scheduled to spend $34 million and the government has set a period of three years for the development. The development will consist of demolishing the existing facilities and reconstructing the hotel,” Minister Loustau-Lalanne stated.
As per the proposal for the redevelopment of the property submitted by Dr Malhotra and Dr Dookun to SIB in September 2018, a 135-room hotel and 9 residential apartments comprising 9 rooms will be erected on the site, which stands on Parcel S121.
The total investment in the project is estimated at $34 million and will consist of deluxe rooms and suites, 13 apartments , 2 swimming pools, 2 restaurants, 24-hour coffee lounge, bar, health and fitness centre and spa, nightclub, conference and meeting rooms and on-site staff accommodation.
“There will also be other activities. We have insisted that they make provisions to accommodate Seychellois as Reef Hotel was well-frequented by Seychellois. We insisted that they have a gallery for artists to exhibit their art, bakery, restaurants, a discotheque and night entertainment and this will all be done on a site on the plot that will allow the local public to access such facilities. The discotheque will be sound-proof. We talk a lot about beach access and we have discussed with the promoter to provide a pedestrian access to the beach so locals can enjoy the beach. The other plot is for the government and the promoter is considering erecting certain infrastructure on the land for the benefit of the community and at their own cost,” Minister Loustau-Lalanne added.
As part of the conditions for the grant of sanction, the company is required to include the name “Reef Hotel” when naming the hotel, bear responsibility for the upkeep and maintenance of the marsh outlet situated on the property and to have completed the whole development and for the hotel to be operational within three years from the granting of the sanction.
Additionally, the government has included a condition which stipulates that the company is to provide and safeguard a pedestrian access for the public to the South of the proposed hotel across Parel S121 during the hours of 6am to 6pm daily and in consultation with the department of Land Transport, provide parking slots for members of the public in the Southern end of the property.
The public will also be able to access the beach through government property situated on the South side of Parcel S121. As part of its community contribution, the hotel will be encouraged to build and maintain light structures on part of the government land, as part of their community contribution.
The ex-Reef Hotel property, Parcel S121 and the Reef Golf Course, parcels S3727 and S3729, totalling 19.6 hectares was originally purchased by Indian Ocean Hotels (Seychelles) Limited, a British-owned company, from W & C French (Seychelles) Limited, another British-owned company, on March 23, 1971 for £54,000.
In 1991, COSPROH, a parastatal company, 100 percent owned by the government of Seychelles, acquired 55 percent shareholding in Indian Ocean Hotels (Seychelles) Ltd from D & L (Pty) Ltd, a British-owned company for R127,400. The other shareholder of Indian Ocean Hotels (Seychelles) Ltd was Commonwealth Development Corporation with 45 percent shareholding.
On June 11, 2004, the golf course parcels S3727 and S3729, was sold by Indian Ocean Hotels to Guiness Overseas Limited for R20 million, following the grant of sanction by government.
Following the grant sanction on September 7, 2001, the Reef Hotel property, Parcel S121 (3.18 hectares) was purchased by St Anne Resorts Limited for $3 million for use of the hotel facilities as offices, training centre and staff quarters from the 5-star hotel under construction on St Anne island at the time, with the view of being converted into either a hotel training centre or redevelopment.
The said property was recently transferred from St Anne Resorts Ltd to Reef Resort Limited, following the grant of sanction on February 7, 2019, at the book value of R81,067,500, as part of the internal restructuring of St Anne Resort Ltd.
The transfer was exempted from the payment of Stamp Duty as St Anne Resorts Ltd and Reef Resort Ltd as associated companies in terms of Section 30 of the Stamp Duty Act. The transfer was also exempted from payment of Sanction duty, as the transfer is in respect of a bona fide investment in the tourism sector, as per the policy. However a Sanction processing fee of 1.5 percent of the book value, therefore R1,216,01.50 was paid to the government of Seychelles.