Gloves come off in Grand Hotel stoush

The Grand Hotel Group board has been accused of misleading security holders by major shareholder Parker Global Strategies. The long running feud over the management of GHG took a bitter turn yesterday when PGS released an eight-page statement to the ASX outlining what they call misleading, untrue and nonsensical statements made by the GHG board to security holders last week.

Security holders in GHG will vote on the PGS recommendations to replace the responsible entity of Grand Hotel Trust with Hotel Capital Partners at a special meeting in Melbourne on October 22.

PGS, who own a total of 12% in Grand Hotel Group, are seeking support from other security holders to appoint Hotel Capital Partners as managers of the property trust.

One of Australia’s most experienced property players James Fielding Group, through James Fielding Holdings, own 50% of HCP.

PCS describes GHG’s performance over the past seven years as “abysmal”.

In its letter to security holders, GHG cites the performance of Grand Hotel Management Limited over the past two months to August 31st rather than the performance of the group over the past seven years.

“How the GHG board can cite investment performance over a two-month period as a reason for its retention is astonishing when one considers that it neglected to mention that fact that over the late five years GHG’s compound return annual return was negative 14.5%.’’

PGS also pointed to the value of GHG’s assets being written down by more than $94 million in recent times.

PGS said in eight vital areas GHG’s information to security holders last week was either untrue, misleading or did not make sense.

Late yesterday, the Takeovers Panel rejected GHG’s request for the independent panel to intervene in its stoush with PGS.

GHG claim to have the support of Singapore’s Tuan Sing Holdings, which represents 25.42% of ordinary securities.

Since January 1, the trust has been managed internally – a decision that was made without investor approval.

GHG has 24 hotels under its control.

In a statement to propertyreview.com.au late yesterday, HCP director Greg Paramor said GHG has under performed for sometime and it was only fair the security holders should have a say in the hotel group’s future.

“Hotel Capital Partners has the expertise to address the problems created by the present management. HCP will focus on recovering hotel earnings and fulfilling the value of one of Australia’s largest hotel portfolios,” Paramor said.

Grand Hotel Group closed yesterday at 64 cents, down one cent down on Friday’s trading.