Although the total outstanding debt of the Ritz-Carlton Grand Cayman is around US$250M the latest documents from Eastdil Secure Ltd, the specialist firm holding the auction, show the reserve has been dropped to US$177.5M – a 30% drop.
On 31st October at 10.00 am at the offices of Conyers Dill & Pearman (Cayman) Limited in Cricket Square, George Town, the Ritz-Carlton Grand Cayman Resort will go under the hammer.
The vendor is R.C. Holdings LLC who are seeking recovery of a debt formerly owed to the firm by Ritz-Carlton developer, Michael Ryan’s companies. They seized the five star resort earlier this year.
The deadline for registration to buy the property has already passed (noon 17th Oct.) and we have not been able to determine who is actually bidding.
The properties being sold are 365 rooms and suites, 12 unsold condominiums, 14 unsold lots designated for a villa development of “deckhouses”, as well as the additional vacant land available for future development associated with the Ritz project, the resort’s nine-hole golf course known as the “Blue Tip Nine”, as well as other facilities.
To qualify as a bidder, interested parties must be present at the auction, either personally or through a representative, and be already registered, having handed over an advanced deposit of US$8,875,000. They also have to demonstrate their ability to pay the rest should they be the highest bidder. The cash sale will be to the highest qualified bidder and if the reserve sale price is met by one bidder and there is no further bidding, that bidder gets the hotel. The minimum bidding increments will be US$100,000 unless otherwise agreed by the auctioneer during the auction.
The original terms showed the advance deposit as US$12M.
The Ritz-Carlton auction documents are available here at:
History of R.C. Holdings loan:
RC Cayman Holdings’ loan had been issued by the Royal Bank of Scotland in 2001. The outstanding loan amount of $161 million was then sold to Column Financial Inc., a New York subsidiary of Credit Suisse, and increased to $250 million before it was sold to RC Holdings nearly a year ago.
According to an online publication, the loan used to build the Seven Mile Beach property was originally extended by The Royal Bank of Scotland in 2001. Six years later RBS sold the loan, which at the time had outstanding principal and interest of $161 million, for an undisclosed amount to New York-based Credit Suisse subsidiary Column Financial, Inc., which immediately increased the size of the loan to $250 million. Column Financial sold the loan last May for an undisclosed amount to RC Cayman Holdings, which was incorporated in Delaware on 4 May 2011.
RC Cayman Holdings LLC, which is registered in Delaware, appointed KPMG (Cayman) as the receiver of the group of four companies, which had developed and owned the five-star hotel and residential developments, effectively wresting control from its chairman and chief executive, Michael Ryan.
The 365-room oceanfront Ritz-Carlton opened on Grand Cayman Island in 2005 and was the first and only five-star hotel in the British Caribbean territory.
In the last several months, Ryan had been trying to renegotiate $7.5 million in deferred import duties owed to the Cayman government as part of its discussions with its primary lender, RC Cayman Holdings, according to correspondence with the Financial Secretary released under a Freedom of Information request.
KPMG joint receiver Keith Blake said the receivership was a “private contractual matter” independent of the courts but would not elaborate.
The Marvin M. Schwan Charitable Foundation, a religious-oriented charity based in Earth City, Missouri is also The Ritz-Carlton, Grand Cayman development’s major other source of funding. According to its 2009 US tax return, the Foundation gave a $202 million outstanding loan to IRR Limited, which was incorporated in the Cayman Islands on 21 April 1998 by Michael Ryan to develop The Ritz-Carlton, Grand Cayman project.
OffshoreAlert suggested recently that the Foundation could be the biggest financial loser if RC Cayman Holdings sell the The Ritz-Carlton, Grand Cayman development for a sum not more than the amount owing on the loan.
