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Banking on Villa

by Shawn Cumberbatch

Rich with history but dogged by controversy, inland hotel Villa Nova has been placed on the chopping block by its owner CLICO Holdings (Barbados) Limited.

And the company, which used $18 million from its troubled subsidiary CLICO International Life Insurance Limited to purchase the St. John property six years ago, an arrangement which raised a red flag in a December 2011 CIL forensic audit, is banking on earning $26 million from the transaction.

The development is apparently not causing officials of CIL Judicial Manager, Deloitte Consulting Limited, to lose any sleep, however, although Barbados TODAY understands the millions of dollars used in the CLICO Villa Nova purchased is considered money owed to the life insurance company.

Sources close to CLICO said the sale of the hotel, located in the heart of rural Barbados, was part of an effort by CLICO Holdings to raise capital, and that a number of other assets owned by the enterprise were also likely to be placed on the market.

The company is a holder of a large number of assets, including agricultural land and office buildings.

It was uncertain, though, how much of the more than $26 million would stay with the parent company in light of information contained in the Deloitte audit report.

When contacted, the court-appointed manager said it had nothing to do with the Villa Nova sale.

“Villa Nova is an asset of CLICO Holdings (the parent company of CLICO International Life Insurance Ltd) and it is CLICO Life and not CLICO Holdings that is under the judicial management of the court,” Deloitte stated.

“Consequently, the sale of Villa Nova is not subject to the direction of the CLICO Life Insurance Judicial Manager.”

In the Deloitte forensic audit report on CIL, Villa Nova was referred to as one of several “significant investments” that were “funded by CIL”.

“Between 2005 and 2006, CIL provided approximately $18 million in funds to CHBL for the costs associated with the purchase of Villa Nova, a hotel property,” it noted.

“The balance owed to CIL by CHBL amounted to $155 million at March 31, 2011 and is the single largest inter-company receivable on CIL’s balance sheet. The balance receivable in the account has grown from approximately $8.5 million as of January 1, 2003 with significant increases in 2005, 2006, 2007 and 2008, most of which related to funding for acquisitions or investments made by CHBL,” the report stated.

“These transactions included funding for Sam Lord’s Castle, St. Lucia Distillers, Villa Nova, Small Ridge (a land development joint venture), Rayside Construction and related expenses. Significant corporate expenses were also funded by CIL and charged to the CHBL inter-company account, such as expenses for a corporate jet and hanger and payments to executives.

The hotel, first built in 1834 as a grand plantation house, re-opened its doors to the public after a multi-million dollar restoration project aimed at preserving its colonial heritage.

That opening was relatively short lived, as the property fell into receivership and was closed prior to CLICO’s purchase.

Villa Nova is considered one of the island’s last remaining great houses of Barbados, and was once the Caribbean home of former British Prime Minister Sir Anthony Eden.The CLICO source pointed out the property was being sold for $26 million, as its value had increased following major renovations between 2007 and 2008.

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