(Jamaica Gleaner) Surrey Hotel Management Limited, an outfit established and owned by Kevin Hedrickson who operates the Courtleigh Hotel and Suites, will take over operations of The Jamaica Pegasus hotel in New Kingston come Friday, October 28.
As a result, the incumbent management, Pegasus Hotels of Jamaica, will be making the positions of the more than 300 staff redundant, Milton Samuda, chairman of the Pegasus Hotel said in a statement.
However, the statement said Surrey has agreed to review applications made by those employees interested in potential employment with the new operators. Interviews will be conducted before October 28.
“Full redundancy payments will be made on October 28, 2011 and all calculations will be verified by an independent auditing firm,” the statement said.
The value of the redundancy payout was not immediately known, as calculations were said to be still ongoing, said Lance Hylton, the lawyer representing Hendrickson’s company, Quivin Holdings Limited, the new majority owner of the Pegasus,
According to the statement, Surrey has indicated that in order to facilitate operational handover, guest rooms and hotel services such as restaurants will be closed for two days – on October 29 and 30.
“Adequate arrangements will be made for guests to be suitably relocated,” it said.
However, it said banqueting services and other booked events will be facilitated as scheduled on the days during which the hotel is closed.
Back in April this year, Hendrickson obtained the approval of the Pegasus Hotels of Jamaica board to lease the hotel to Surrey, a new company he created for that purpose.
Under the lease proposal put forward by Hendrickson, he was prepared to pump up to $800 million into the hotel, to buy its old equipment and fixtures and upgrade it over a three-year period.
That he proposed in return for a 25-year lease of the property with payments of US$1 million for the first year of the lease, US$1.2 million in the second year, US$1.4 million in year three, and thereafter the management fee would increase at the rate of US inflation, capped at three per cent.
Hendrickson was unavailable for comment yesterday as he was said to be in an all-day meeting. However, Hylton told the Financial Gleaner that Hendrickson was willing to do whatever is necessary to turn around and return the company to profitability.
“The company has been doing badly for some time now and continue to decline; it needs refurbishing, to be recapitalised; just like what he (Hendrickson) did with Holiday Inn and Knutsford Court, he wants to do that with Pegasus,” said Hylton.
A full refurbishment of the Pegasus hotel is expected to take place in 2012.
Hendrickson, through Quivin, owns 59.81 per cent of the Pegasus hotel.
Only last week, an agreement was reached with hotelier John Issa to sell his shares in the hotel to Quivin, a deal that would give Hendrickson a 93.4 per cent stake in the property.
That agreement is expected to be finalised on October 18.
Following that, Quivin will then make an offer to the remaining minority shareholders for the outstanding 6.6 per cent of the hotel’s shares.
The stock is now trading at $15.50 per share, up from the $13.14 per share or the US$11-million price Quivin paid last November to acquire majority ownership of the holding company, Pegasus Hotels of Jamaica.
Pegasus Hotels of Jamaica is expected to be delisted once a 90 per cent ownership threshold is reached.
