The Holman Grand hotel will soon re-open for business after Homburg International bought it and four other buildings in downtown Charlottetown.
Homburg International announced the deal Wednesday in a news release that said it was buying Hardegane Investments, which owned the properties.
The acquisition also includes the Confederation Court Mall, the National Bank Tower, BDC Place and the Homburg Financial Tower.
In the news release, Homburg International chairman Richard Homburg said the deal means his company can reopen businesses, bring people back to work, generate economic activity and consolidate its corporate presence in Prince Edward Island.
“We are gratified that the province has supported us in this and we look forward to contributing valuable and successful properties and relationships in the community of P.E.I.,” Homburg said.
Last year, the hotel’s former owner, Homburg Invest Inc., shut it down after what it considered unsustainable losses while the company was restructuring under creditor protection. That restructuring left many creditors unpaid, including the provincial government and contractors who worked on the hotel during its construction.
A meeting of Homburg Invest Inc.’s creditors is planned for later this month where they will vote on a settlement plan. That plan likely won’t see every creditor paid all they are owed and Homburg International plans to review any remaining claims after that repayment process is finalized.
Homburg International will make goodwill payments to the remaining creditors where appropriate, the news release said. To do that, Homburg International says it has $1.75 million earmarked for creditor repayment.
Richard Homburg has not been involved in Homburg Invest Inc.’s management since March 2011.
Homburg Invest Inc. sought creditor protection in September 2011.
Although they both bear Richard Homburg’s name, Homburg Invest Inc., which is a public company, and Homburg International are separate businesses.
The news release said Homburg International plans to re-open the Holman Grand immediately, start hiring staff and accept bookings.
Prior to the sale announced Wednesday, Cominar REIT owned Hardegane Investments, which in turn owned Dyne Holdings.
Dyne Holdings owned the hotel and the other properties Homburg International purchased.
There are outstanding loans with the provincial government on some of the properties and the news release said they will be preserved without any write-downs in public money owed.