Owners consortium bid to buy HVR assets ...

The following "bid news summary" is from the HVR bid consortium led by Mike Ward:

On Friday 6th March a bid was submitted by Mike Ward and his team of Owners at Humber Valley with a view to buying the resort assets and running a successful commercial business.

The plan recognises the problems of the previous management teams and misguided focus, and what is needed to turn the resort around. The previous failed business model of selling land at high prices clearly hasn't worked and any plan with this as the short term model will fail.

The resort needs to implement a successful operational model to bring in local people which in our view is absolutely key to the success of the resort. The golf course would be run by a professional golf course resort management team and would ensure that the green fees would not be at the previous high levels. The golf course is exceptional, won many awards, and we would want to ensure that local people benefit from this experience. We intend to encourage local golfers to play more on the course with special discounts for locals.

Many Owners felt the original HVR strategy was failed by the lack of a planned hotel operator for the resort in the early days. Many successful resorts around the world have the common theme of having a hotel at its centre, and it being the heartbeat to the resort. This would often include restaurants, fitness centre, swimming pool etc. This is key to the success of the resort and the team has already had positive meetings with a large professional chain and would expect to sign contracts with the group if successful with the bid.

When asked about building more properties on the expansion land Mike Ward explained that there were many properties on the original land that needed to be finished first, adding "Building more properties in the expansion land is clearly not a focus in the short term, however there are several plots of land on the edges of the development which have no access. Clearly something would have to be done to bring them services and accessibility"

Asked about the other bids on the table he preferred to focus on his bid which is clearly what is needed at the resort. A professional hotel chain, potentially with a conference centre and a golf course operator is needed to give people the experience so they want to come back again and again.

Asked about other people who have been involved in the failure of the resort coming back he said "Their credibility has been publicly ruined, and the history will make it hard for them to be trusted again. This would be a disaster and I'm not sure where it would lead - they should not be allowed to bid without an investigation into the historic dealings at the resort, sometimes you have to just look at the bigger picture and do what is best for the resort and the local community. This might mean withdrawing from the process and wishing another bid the best of success - it takes somebody who is magnanimous to do this".

The vast majority of the owners would like the owners-led bid to succeed. In our opinion the owners feel strongly that they were badly let down by the previous management teams at HVR and now want to take control of their own destiny. The previous management teams do not seem to be accepting responsibility for the bankruptcy of the resort, and the severe financial consequences for both the owners and trade creditors.

Asked about his motive to get involved he said "it's a case of having too. I have several properties and numerous plots of land. If this resort fails then everything I've spent the last 30 years working for is lost". When making a decision to bid it was not a difficult one because he is so passionate about the people and the area. Asked if he could see himself living in the area the answer was "yes that was always the long term plan. It just seems it might happen quicker than planned"

Brian Dobbin announces his HVR bid to Owners

Brian Dobbin declared his bid for Humber Valley Resort assets late last week by emailing some HVR chalet owners.

One immediate comment from me, Brian refers in his letter to "anonymous blogs on the owner website". I'd just add FYI that we have over 400 owners, over 1,000 site emails between owners, 780 forum entries, across 199 subject titles - of which 1 (one!) was made anonymous simply to evaluate if having your name detered some owners from participating.

Anyway, read the letter below. Your comments are encouraged and welcome here, and on the Gary Kelly blog where there is a stream of previous comments!


______________________________________________

Dear Humber Valley Resort property owner,

As you will have seen by Mike Ward's email, the tender for the purchase of the Humber Valley Resort assets is due. One falsehood spoils a hundred truths, so I am corresponding to let you know that I am leading a group to purchase the assets. As many of you may know, I began the resort and Strawberry Hill in the Valley over a decade ago.

The simple history of Humber Valley Resort is that I raised
approximately $15 M CDN in the late 90's in Asia and built the first access to
the land and started the first marketing efforts. We then sold over $60 M CDN of
land which was re-invested back into the resort, including over $20 M CDN in
construction losses from the home cost escalations as we built out the first 200
homes. I then sold the resort into a public company, which allowed for another
approximately $40 M CDN to be invested in the resort and its operations. This
included flights, tourism marketing, and paying the operating costs of
everyone's chalets for the first two years of the resort's operations.

The short story is that a lot more money went in than went out, and I do
not think my commitment to the future of tourism in Humber Valley should be
questioned, especially not on anonymous blogs on the owner website. I also
continue to own and use properties at the resort and am not trying to sell them.
I believe that the majority of owners bought their property to enjoy the resort
and surrounding area, as I do, and commiserate with those who bought for
property speculation and have not sold yet. Both parties are best served by a
continuation of the resort's growth as a destination.

I did not take a dividend at any time from the growth of HVR, reports of a pay-out were
unfortunately false. I do have 50 million Newfound shares that I can paper my
home with however. I left the public corporation in 2007 as I was tired of
fighting directors over control of the company and wanted to give those who
criticize the opportunity to take the lead. In the period since then I have
spent more time at Humber than I had in the previous five years. This time
reinforced why I love the place so much, and the fun that can be had here side
by side with spectacular nature and retreat.

We made the tourism operations profitable at Strawberry Hill Resort with a small dedicated team and little overhead. Humber Valley Resort grew into something that could not work. Some of the parts we were forced into - like picking up the flight cost five
years ago and continuing them when our first travel partner could not, and
having to market the destination because the provincial government would not.
What we ended up with was one company trying to do 15 jobs and doing them
not-so-well. The bankruptcy has caused all those pieces to fall on the ground,
and they are being picked up now by a number of different stakeholders and
interested parties.

The roads and water have been admirably dealt with by the owner association to date, but given the problem of enforcing cost recovery without legal right, the two local municipalities looking to take over their upgrade and maintenance makes the most sense. This is what is done at the Whistler and Mount Tremblant resorts in Canada. The maintenance and rental of Humber chalets is being serviced by at least a dozen smaller companies now, and this also is the norm in a resort town.

The government has come around a lot since the resort went into protection and then bankruptcy. The impact on the local economy has been noticeable and they are committed to participating more in the future. Being a third generation businessman in Newfoundland, I understand the politics here, and what is noticeably different now is the
province has been enjoying a budget surplus for the last while before the economic crisis and will do so again this year if the price of oil moves a reasonable amount. This is the first time in two generations that has happened and we believe the decision-makers in the provincial government are serious about investing in tourism growth here with us now. More direct flight access is being investigated and support of the local industry association and specific international marketing help for the Valley has been promised.

What is left in operations is the golf/clubhouse, the Beachhouse, and Strawberry Hill.
Our group intends to make all three separately owned and operated businesses,
co-operating together and offering different products. We will be bringing back
our best people who made you want to be here in the first place. We are also
bringing some new people in that will help attract new domestic markets for the
next years. We are now the best resort destination by far on this side of
Canada, and we will take advantage of that. We believe we can renew the magic
that Humber had it is really the people. I looked long and hard at branded
international operators and the reality is that they would be fish out of water
here at this stage of growth and would simply be too expensive to pay in any
regard.

We expect to lose some money in the next few years, but we can
make all three operations what Strawberry Hill was. We have the means to weather
the financial downturn for the next years and we will keep our overheads as low
as possible while creating three great experiences. Development talk for the
next years is premature. The only immediate concern is those who are on the
edges of the resort and the infrastructure that needs to be finished there. This
itself will take time to address as only new sales will drive it. We first need
to get the people who want out of the resort replaced with people who want in.
That will only happen with a good tourism experience, so we all agree what has
to happen. I believe we best know how to develop and sustain a great experience
at the resort.

I did not intend to communicate with the property owners as a whole until the bids were complete and the deal made, but I thought it time to let everyone know another side of what is happening. Should we be successful we shall contact again with more detail.

Brian Dobbin

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Newfound now at 1/2p (£0.005)

Today someone sold 240,000 shares in Newfound NV for as low as £0.005p. Yes, that's half a pence per share! If that person had bought when the company (not so long ago) first floated (at around £0.70p), those shares would have cost £200,000 ... and were sold today for £1,400

OUCH!

But perhaps it reflects the rumours I'm hearing about Newfound's possible plans to get back into Humber Valley Resort on Western Newfoundland. The resort is about to come out of CCAA administration and is in a tender process ending next week. Word has it that both Newfound NV, and the original founder of the resort Brian Dobbin are likely to be bidders to regain control of the resort. However the business plan and logic for both is rumoured to be based on being given control of further Crown Land (aka the Expansion Land) by the Provincial Government, and then making their money on selling land to investors, along with a future promise ... [sound familiar??]

I hear from well placed sources that the government has made it clear at recent meetings that they are far from ready to be giving away the additional Crown Land at HVR, and that it will not be allowed to be part of any bid.

Perhaps the stock seller realised that any opportunity at HVR is not likely to match the normal Newfound business model of land sales?

And is Brian Dobbin's commercial plan any different? I suspect it's actually similar to the original HVR plan, and does include the expansion land as its main driver.

What do you think?

Newfound results and re-structuring announcements

Newfound NV released their annual results today, and at the same time announced major changes to the management structure, and corporate financing.

The following is the Humber Valley part of the Chairmans statement:
"At the beginning of the year the sales strategy was altered to attract high net worth purchasers to Humber Valley Resort in Newfoundland, Canada. This strategy has taken longer to deliver results than originally envisaged with new sales of US$ 4.7million which was below expectations, although in addition there were a number of re-sales.

We believe that there is a market for our product at Humber Valley at the US$ 750,000 level as evidenced by the re-sale market and from early 2008 this is where we have been concentrating our marketing efforts.

Since the autumn we have focused on vacation marketing to Humber Valley. This is an important aspect of the business as it gives a momentum throughout the year, increases our operational revenues and some of our vacationers have gone on to purchase property. We have now signed agreements with a number of Tour Operators who can sell vacations to the resort. Most of these Tour Operators are based in Europe and Canada, but due to the time lag in operators publishing their brochures and websites, we expect the main impact to be felt from the 2008/2009 ski season.

Humber Valley Resort's occupancy in 2007 rose by 18% over 2006 resulting in an increase in operational revenues in local currency of 16%. The first three months of 2008 showed further progress. Going forward, we are looking for further suitable agents for the North American markets and focussing on the conversion of vacation leads and enquiries into real bookings as well as enhancing our web based sales and marketing strategy.

Our current owners at Humber Valley are our best marketing avenue and we have been talking with many of them to see how we can improve the operations there. This has resulted in a review of the way the accommodation rental pool is operated to make it more simple and transparent. Priorities have been set for infrastructure capital spending that is required to benefit both owners and vacationers and improve the existing facilities.

As mentioned in my statement last year, we have been addressing the construction issues and although some still remain we did achieve our aim of accelerating the construction program during 2007 and we are making healthy margins on new build. During the year, we carried out significant construction work on over 60 chalets resulting in an increase in revenue in local currency from construction and furnishings of 66% to US$ 21.3 million. We have nearly completed the construction backlog inherited at the time of the Newfound acquisition in 2006 and, subject to suitable funding being in place, it is hoped that all of the remaining outstanding contracts will be started during 2008.

In 2007, the first full year of operation of the 18 hole golf course, we won four prestigious awards including Golf Magazine (golf.com) Best New International Course 2007 and ScoreGolf Magazine's Best Canadian New Golf Course 2007. The credit for this must go to our Golf manager and his team.

We have recently signed an agreement with Monarch Airlines to run a weekly Boeing 757 from Gatwick to Deer Lake to cover both the summer and winter seasons, thus supporting the expected increase in vacation traffic. Although the charter at present makes a financial loss until such time as vacation numbers increase, it is an important part of both the operations at Humber Valley Resort and its future development."

In addition todays annoucement included a new CEO, and a future new Chairman with Jeremy White standing down as Chairman when the right replacement is found.

Jayne McGivern, the former chief executive of Multiplex's UK arm, has taken over as head of a Newfound. McGivern, who left Multiplex in February in the wake of its takeover by Canada-based Brookfield last summer, was this morning appointed CEO of a new management team at Newfound.

Read the full statement - ShareCrazy or Newfoundresorts.com announcements
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William Thompson leaves Newfound NV (HVR owners)

Newfound NV (owners of Humber Valley Resort) released a statement today, stating that William Thompson, senior vice president Business Development, and one of the original resort directors along with Brian Dobbin, has resigned his directerships with immediate effect.

Is this simply a stage that the business needs to go through as it matures? - time will tell!
Actual release

Brian Dobbin resigns Newfound directorships

Newfound has announced that company president Brian Dobbin will be stepping aside from his position effective Dec. 31st. In the press release, the company, which owns Humber Valley Resort near Corner Brook, announced Dobbin “will be resigning his Newfound directorships, to pursue personal interests.”

The company said Dobbin’s shareholdings in the company “are unaffected and existing restrictions on the disposal of shares remain in effect.” In addition to the locally well-known Humber Valley project, Newfound has other resort projects in Nevis and St. Kitts. On Dec. 13th, two other Newfound directors provided much-needed working capital for the company.
View press release

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MERRY CHRISTMAS TO ALL
Daniel & Kate

River Course at Humber Valley Resort Best New Course in Canada

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The Humber Valley Resort’s scenic River Course has been awarded "Canada’s Best New Course of 2007" by ScoreGolf Magazine. The 18-hole, par 72 championship course, which opened in 2006, offers spectacular views from all holes including the panoramic backdrop of western Newfoundland’s mighty Humber River and the breathtaking Humber Valley mountains.

The River Course, located in the Humber Valley, Newfoundland, was designed by renowned Canadian architect, Doug Carrick and is an outstanding feature at Newfoundland’s Humber Valley Resort. "Doug Carrick designed the River Course to be a great play for both experienced and novice players. It is the kind of course that you want to come back and play again," says Brian Dobbin, Newfound Resorts Chief Executive Officer.

The River Course was selected as the Best New Course in Canada by an esteemed cross section of Canada’s finest experts in golf. "We are honoured to have been named the Best New Course in Canada by ScoreGolf," says Dobbin. "ScoreGolf is a very prestigious Canadian golf publication and it means a great deal that editors and rankers feel that our River Course deserves to be rated the top new course in Canada this year," adds Dobbin.


Referred to as one of the best holes in the country, the 10th hole is the most rewarding and challenging of the course. "The most spectacular course to open in Canada in recent memory…Worth heading to for the 10th hole alone" says one ScoreGolf Panelist. While the 10th hole is the most notable for its degree of difficulty the rest of the course provides its own unique challenges for golfers.

"Newfoundland golf is unique in many respects" says Jamie Digby, Director of Golf for The River Course. "We have the perfect formula for an award-winning course with a Carrick design, extraordinary location and a devoted golf team. We strive to exceed our guest’s expectations on every round."
ScoreGolf New Course award site
Humber Valley Resort PR release on the award

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