24 January 2018
The Mantis St Helena hotel is wholly owned by St Helena Government (SHG) having taken the decision to fund the building of a hotel in the absence of any investor, international or local, coming forward to do so. The Company, St Helena Hotel Development Ltd (SHHD), is a SHG entity which was tasked by Executive Council to oversee the construction and initial operation of a four star hotel. Mantis has been contracted by SHHD to manage the operation of the hotel. It was never part of the Hotel Management Agreement that equity would be offered to Mantis.
SHG is being asked by SHHD, not by any other organisation, to provide a Guarantee to allow the company to seek additional loan finance from the Bank of St Helena. The Company is not asking SHG to provide this funding from the Government reserves – a Guarantee is a ‘promise to pay’ in the event the loan is not paid. The additional loan finance of £500,000 is required to pay for the completion of the build, which was hindered not only by currency fluctuations but also the RMS delays and additional costs incurred through bringing artisans to the Island to complete the project. The construction project was over budget by 13.9%, which while regrettable, is not unusual for a project of this size. The remainder is to provide working capital for the hotel, due to the uncertainty of future visitor numbers. While the operation is only a few months old, operating performance over the Christmas and New Year period has been encouraging.
SHHD is aware that allegations have been made regarding overcharges on equipment and is working with the project management team including their Quantity Surveyor, to ascertain any validity and will take the appropriate action if required. SHHD’s financial statements are verified by the Saint Helena Audit Service and scrutinised annually by the Public Accounts Committee.
24 January 2018