Roller sells hotel for half what it paid four years ago

By Chris Hutching

Friday 12th May 2000

Former director of financially troubled Roller International, Tony Ng, has bought the company's flagship Sovereign Resort Hotel in Methven for $1.65 million in a mortgagee sale - this compares to $3.8 million paid just four years ago.

Roller is the country's oldest listed company and a former flour miller in Canterbury. It was bought in 1996 by a group of Singaporean businessmen headed by Liang Seng Tan who arranged for the purchase of the hotel after a visit to Methven.

The huge difference between the original price paid and the latest price, based on commercial valuations, raises questions about whether the hotel market at Methven has slumped or the earlier price was excessive. According to a source in Methven trading has steadily improved in recent years but the earlier price was inflated and based on hype and wishful thinking during the mid-1990s about the earnings potential of the hotel.

Even recent upgrading worth close to $1 million provided mixed benefits. For example, the resort has top-quality conferencing facilities for 450 people and a new swimming pool but only 46 rooms. Sovereign was also bought at the same time as another nearby resort, Brinkley Village, came on the market in competition. Another accommodation wing at Brinkley has yet to be completed according to the original concept and while the hotel is now picking up trade, as an investment it proved disappointing and there was litigation between the developer and investors.

But the immediate prospects at Methven in coming months look positive and the resort town at the foot of ski mecca Mt Hutt may suffer from too many visitors soon. This is because the crew of the Lord of the Rings film are due to descend on the village in August for a month coinciding with the peak of the ski season. The film crew is looking for 400 rooms.

Meanwhile, having quit its hotel involvement and satisfied the mortgagee with $1.3 million owed, Roller remains a listed shell with an uncertain future. Former managing director Les Holt is still suing the company for $470,000 in lost salary and damages. He remains a significant shareholder.

It is believed there are four parties interested in the listed shell but Mr Tan, who led the original syndicate, remains hard to contact. He resigned as chairman but remains a director.

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