200 Bed Travellers lodge
National Park
In early 2006 CapitalGroup was approached by an established accommodation developer to assist with the funding of a 200 bed mountain lodge development situated in the National Park township in the central North Island.
The developer had previously built and was operating 5 significant facilities across the country having built his portfolio of properties up over many years.
The initial risk for the project was partially mitigated by the developer securing two income streams;
with Ruapehu Alpine Lifts (RAL)
to house ski field staff over the winter months, and with an established tour
operator Stray to provide accommodation to its daily
tour clientele.
Shortly after construction was completed the developer approached CapitalGroup with some unique issues requiring an innovative financing solution.
Firstly, the developer disclosed that he was undergoing a dramatic reorganisation of his business affairs which
included the sell down of his 5 existing facilities to a large Australian investment fund. Secondly, he wanted
to exit the
day to day management of accommodation properties and
their associated management issues, and thirdly,
he wanted to sell down his interest in National Park and move into a passive management role.
CapitalGroup solved all three issues. We arranged two new tranches of equity. The first coming from CapitalGroup’s own balance sheet and the other from a very successful businessman and his family.