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Beef Island

Golf Course May Be Ditched

In a press release dated March 17, 2008, Hong Kong-based Applied Development Holdings, the Bermuda-based corporation behind the Beef Island Development, announced its interim results to December 31st, 2007.  In a move that shows how seriously Applied Development is taking the challenge to the project made by the Virgin Islands Environmental Council (VIEC), the corporation has offered to shelve plans for the construction of a 180-acre golf course.

  

Citing the legal challenge by the VIEC, Applied Development stated: “Although there may be changes to the Master Plan as a result of the challenge, our experienced JV partners, InterIsle, who developed the St. Regis Resort in Puerto Rico and Yacht Haven Grande St. Thomas, has already started to prepare a new Master Plan to address this matter.  The management believes that the new Master Plan, which has the golf course eliminated, may not only furnish the 180 acres excess land for more residential units to be built and sold and more green facilities, but also save construction and yearly maintenance costs of the golf course.”
    
Regarding financing for the project, Applied Development sees problems ahead should the legal challenge prevail.  According to the company’s release, “Although the final stage of the grant of the initial loan and project loan to Quorum Island has been reached, the Proposed Bank may delay its financial decision on the provision of loan for the BVI Project due to the above-mentioned challenge.  The coming trial date of the BVI Project is scheduled on 14 May, 2008.”
    
Further complications pertaining to the project are seen as a result of the imploding credit markets in the US and further afield.  “Although the negative impact on the US sub-prime debts was announced recently, there is still healthy development in the resort market in the neighbourhood where the BVI project is situated. Nevertheless, the management believes that there may be a delay in fund-raising of the BVI project as a result of the adverse credit market.”
    
As part of the earnings release, Applied Development indicated that the golf course was a defining part of the original development plan, stating that “the building of a 180-acre golf course out
of 663 acres of the total development for the project…. was one of the conditions in the
approved master plan of the BVI Project (the “Master Plan”) requested by the former Prime Minister.”
    
The company shows a profit of approximately US$1.6 million for the period on a turnover of US$500,000.  Much of its financial performance is ascribed to an “increase in fair value of investment properties” of just over US$3 million.  The company’s results can be found online at http://www.hkexnews.hk/listedco/listconews/sehk/20080317/LTN20080317229.pdf  

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