25Oct11



New window stickers for all the empty units in Cap Cana


In recent months Dominican Watchdog has received several emails from worried investors in Cap Cana who informed us that Cap Cana is not able to pay their part of the monthly condo fees for all the empty apartments and shops. This is not only hurting the maintenance of the development, but also their image as a luxury development and investment object.

Dominican Watchdog wrote to Ricardo Harzoury for an answer to this and the fact that huge discounts are given to buyers in Punta Palmera for closing instead of walking away from their contracts. Ricardo Harzoury never replied to our email, but Yesterday he released the press release below.

From the readings between the lines its all crystal clear, Cap Cana is in serious trouble and even worse, none of the investors has been able to resell anything in Cap Cana for the last 2 years unless they took huge loses!! The promised rental income is also not happening so investors are trapped with properties worth million of dollars in probably the most boring resort in the Caribbean.

JUANILLO, Dominican Republic, Oct. 24, 2011 /PRNewswire/ — Cap Cana, S.A. (“Cap Cana” or “the Company”) today announced the status of the collateral securing its 10% Senior Secured Notes due 2016 (the “2016 Notes”).

The amount of Eligible Receivables that meet the eligibility criteria set forth by the Indenture of the 2016 Notes is approximately US$98.3 million as of June 30, 2011 and $93.4 million as of September 30, 2011. The Company’s estimate of the Collateralization Ratio is equal to 1.02:1 as of June 30, 2011 and 0.97:1 as of September 30, 2011. The decline in the Collateralization Ratio during the first nine months of the year is primarily due to receivables falling into arrears as a result of adverse macroeconomic conditions.

Construction of the real estate properties securing the 2016 Notes (the “New Notes Project”) has significantly slowed down due to lack of funding. The Company had planned to finance the construction of the remaining components of the New Notes Project through a credit facility with a top-tier investment bank. However, the availability of adequate financing for real estate development companies such as Cap Cana has been dramatically constrained over recent months and the Company was unable to secure the specified financing. As a result of the factors described above, the decline in the Collateralization Ratio is expected to continue.

The Company has suffered a substantial slowdown in sales of its real estate properties during the first nine months of the year. Sales of real estate properties to individual buyers totaled US$13.0 million during the first nine months of 2011 compared to US$28.5 million during the same period in 2010. Sales of development sites to third party developers have comprised the majority of Cap Cana’s sales since it re-focused its sales strategy in late 2008; however, year to the date, the Company has been unable to finalize any transactions involving the sale of large land parcels.

During the first nine months of the year, the Company has continued to cut its staffing levels and other operational expenses, restructured debt with its local and international lenders and has entered into payment-in-kind transactions involving real estate properties with numerous suppliers and contractors. In addition, Cap Cana undertook a debt cancellation program by entering into payment-in-kind transactions involving real estate properties whereby the Company was able to cancel approximately US$72 million in aggregate debt during the first nine months of the year.

The long-term effects of the 2008 financial crisis, and the subsequent world economic recession, have had a significant impact on Cap Cana’s business and financial condition. The Company intends to continue developing the Resort. However, given the adverse real estate market and operating conditions under which the Company is currently operating, and the uncertainty in the foreseeable future, it cannot guarantee that its future cash flows will be sufficient to cover all of its financial obligations.

Source: http://capcananews.wordpress.com/2011/10/25/cap-cana-probably-not-able-to-cover-its-financial-obligations-in-near-future/

Not surprised.............

The problems are not just for Cap Cana but for all other resorts as well ,,it is just that Cap Cana is the most vulnerable in that it does not now have rich backers such as Casa de Campo or Metro and probably also now at la Estancia ..where there are new owners
I have been told by various people that there are more than 500 houses for sale in Casa de Campo at present , some at very low prices. At the same time the various owners are complaining about the huge charges being foistered upon them by the management companies ,The word gets around quickly ,

What surprises me is the lack of initiatives shown by the management companies to assist sales or to maintain a cash flow. The prices for a round of golf at Cap Cana and at Casa de Campo are quite ridiculous when compared to the rates in the USA or on other caribbean islands and no one is playing golf or spending money on food or beverages. $300 a round is simply too much and the word has got around to avoid the places with high green fees .
It seems that the owners are locked into a nasty situation in Cap Cana and Casa de Campo , unable to sell and facing increased charges .
All very well to blame the economy but bad management also is playing its part . Just as an example I see on an advertisement that the entry fee for the 3 rounds of the DR Open Golf is more than $750 and on another advert , that dinner at the Marina for 4 people with a bottle of wine is more than $500. No wonder numbers are down and places are empty

Ricardolito, kudos on a very informative article. i wrote about this matter many moons ago, and was taken behind the woodshed by types like Blutarsky, and soundly ridiculed. guys who play recreational golf do not need to play on a course that reminds one of Pebble Beach. some fireman from Camden, New Jersey, wants a decent course, where he can take a good hack at a few dozen balls. to be naive enough to believe that building impressive golf greens would be the calling card for that area is beyond simplistic. no average individual is going to pay those fees, especially when he is coming from a country which has just as impressive facilities, at half the cost. there are just too many people in the Dominican tourism scene who have no idea of what is going on. they may be great businessmen, and successful scions of commerce. they just know zero about human nature, and what will sell. now they are stuck with white elephants at every turn. a darn shame, if you ask me.

What I see in this case is what I call the "Lifestyles of the Rich and Famous" syndrome. I'm referring to a TV program that was hosted by a British chap called Robert Leach; in which they would portray the swanky mansions, the exotic enviroments, the lavish tastes, of the rich and famous.
I believe that by waving all these luxuries before everyday Tom, Dick and Harry or Plain Jane, the whole world was corrupted into yearning for opulence. All of the sudden the everyday laborer wants to be wealthy. Even in the third world.... Nothing wrong with that; but, not everyone can be affluent?

Which brings me back to Capcana and the vacant properties, I think that the global economic down-turn is an established fact. Who ever over played their hand and built like there would be no financial downturn, building like a child in a sand lot, maximizing on every available square foot, messed up royally.


Speaking of Casa de Campo: There are only so many milionaires like De la Renta, and Julio Iglesias that can have breakfast in La Romana, and have dinner in Milan. There are only so many rich and famous folks like Jay Z, that can fly in on a chartered jet with a bunch of friends for a night of lively wining and dining Palm Beach (ampambichao) style.
But, Capcana was meant to be for the less affluent, and those people don't have money to burn, like the upper crust that may frequent a $300 per green fee golf course. Those are 3 Benjamins, man! The type of customer that would buy into Capcana would be a six figure earner from Miami or Milwaukee. And, I don't know what these realtors and developers in DR are smoking? But, a global recession affects the whole planet. Not eveyone in the U.S. or Europe is a drug trafficker? Not everyone has a money tree in their back yard? So, if the world is going through lean times, you can expect that your newly developed island resort beachfront balcony condo isn't going to sell that easy? It's a matter of logic. When the going get's tough, the wise ones play their cards close to their chests. No hay 'pa tanto lujo y pajaritos volando en el Caribe, etc. Forget about it!

No Guarocoya it "forgetaboutit."

I remember when Cap Cana was first introduced to the market during the RE boom. They achieved a record, beat projections beyond expectations, practically all sold out on opening day. They had more than US $300 million gross sales, 95% of inventory in the first four hours.

Donald Trump was used as the huckster to endorse the project as if he were a major player in the operation, when in fact was only a well compensated beneficiary of licensing rights. Cap Cana took advantage of his name and image to promote the development. If I am not mistaken, Trump later sent one of his newly hired inexperienced management interns that was first introduced on his TV show to overlook the project.

Anyway, I had one negative experience as an investor on another project that used his name. I learned that when ever you see Donald Trumps tentacles getting involved in some RE deal my recommendation is unless your are in direct control, an actual decision maker, take your money and RUN like HELL as fast as you can.

Bingo! I'm dyin' over hee.

Badabing, badaboom! Whadda ya want from me, heh? LOL .

The word's out:



Cap Cana Announces It Will Miss Coupon Payment on Its 10% Senior Secured Notes Due 2016

By Cap Cana, S.A.
Published: Wednesday, Nov. 9, 2011 - 1:32 pm

JUANILLO, Dominican Republic, Nov. 9, 2011 -- /PRNewswire/ -- Cap Cana, S.A. {"Cap Cana" or "the Company"} announced today that it will not be able to make the interest payment originally due on October 31, 2011 to the holders of the 10% Senior Secured Notes due 2016 {the "2016 Notes"}. The amount of interest due is approximately $4.8 million. The Company further announced that, based on its currently projected cash flows, it will not be able to resume interest payments on the 2016 Notes for the foreseeable future.

As of October 31, 2011, the outstanding balance under the Indenture governing the 2016 Senior Notes was $96,030,500 and the outstanding balance under the Indenture governing the 2016 Recovery Notes was $119,080,662 including both principal and accrued unpaid interest.

Under the Indenture of the 2016 Notes, the failure to pay interest constitutes an Event of Default. The Event of Default triggers cross-default provisions in the Company's 10% Senior Secured Recovery Notes due 2016 {the "2016 Recovery Notes"}.

The Company will host an investor conference call to discuss the events of default, the economic and market events leading to the Company's current financial situation, the efforts undertaken to date to reduce costs and improve its financial condition and the uncertain economic and market outlook. The Company shall also present possible resolution strategies.

The call will begin at 9 a.m. Eastern Time on Friday, November 18, 2011. Interested parties can listen to the live conference call by dialing 1-(888) 566-7603, access code 8839262. International callers can participate by dialing 1-(630) 395-0351, access code 8839262. A replay of the call will be available at 1-(866) 407-9273, access code 1914 until November 25.

Please address any questions or comments related to this press release to Cap Cana's Investor Relations department, email address: investor.relations@capcana.com, or by calling (809) 695-5501, ext. 3818 / 3412.

About Cap Cana

Cap Cana is a 30,000 acre master-planned luxury resort and real estate community located on the eastern tip of the Dominican Republic in the Caribbean. The community is fully operational with championship golf and yachting facilities, a world class hotel, pristine beaches, a variety of dining and retail establishments and numerous other amenities. Since breaking ground in 2002, Cap Cana has invested approximately $800 million in infrastructure and other improvements and has entered into contracts with aggregate value of approximately $1.5 billion for the sale of approximately 1,500 units of real estate properties. Throughout this period, Cap Cana has delivered over 700 real estate properties to buyers, including retail and developer hotel lots, condominiums and villas. For additional information, visit www.capcana.com.

This press release includes forward-looking statements that reflect Cap Cana's current views with respect to future events. These forward-looking statements are based upon estimates and assumptions made by Cap Cana that, although believed to be reasonable, are subject to certain known and unknown risks and uncertainties. All forward-looking statements contained in this press release are qualified in their entirety by these risks, uncertainties and other factors. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates. We disclaim any obligation or undertaking to update publicly or revise any forward-looking statement contained in this press release, whether as a result of new information, future events or otherwise. Future events or circumstances could cause actual results to differ materially from historical results or those anticipated.

For additional information contact:Investor Relations Department(809) 695-5501 ext. 3818 / 3412investor.relations@capcana.comwww.capcana.com

SOURCE Cap Cana, S.A.

Source: http://www.sacbee.com/2011/11/09/4042813/cap-cana-announces-it-will-miss.html

9 de Noviembre del 2011, 11:12 PM
Cap Cana anuncia cesación de pagos millonarios
Pasivos frente a bonistas superan los 100 millones de dólares



SANTO DOMINGO (R.Dominicana).- El grupo Cap Cana anunció esta noche a sus acreedores que no es capaz de pagar los intereses que vencieron el pasado 31 de octubre y referidos a los bonos que vencen en el 2016.

Esa declaración es una cesación de pagos real, sobre todo que el monto dejado de pagar asciende a 4.8 millones de dólares estadounidenses, según una nota publicada en inglés por la agencia de prensa de negocios y economía PRNewswire, de Nueva York.

El grupo Cap Cana anuncia que no es capaz de pagar los intereses en el futuro previsible. El total de la deuda en dólares ronda los 120 millones.

Cap Cana anuncia para el próximo 18 de noviembre el proceso de negociación con los acreedores con lo cual se coloca en quiebra real.

A continuación se inserta una traducción libre de la noticia dada a conocer al mundo por la referida agencia que trabaja coordinada con Wall Street.

"JUANILLO, Dominican Republic, Nov. 9, 2011 /PRNewswire/ -- Cap Cana, S.A.

("Cap Cana" o "la Compañía" anunció hoy que no va a ser capaz de hacer el pago de intereses que originalmente vencían el 31 de octubre 2011, a los titulares del 10% de las “Senior Notes” con vencimiento 2016 (“Notas 2016" .

El monto de los intereses devengados es de aproximadamente $ 4,8 millones. La compañía también anunció que a partir de sus flujos de efectivo proyectados en la actualidad, no será capaz de reanudar los pagos de intereses para el futuro previsible a las Notas del 2016.

Al 31 de octubre de 2011, el saldo pendiente de pago bajo el Contrato de Fideicomiso que rigen bonos senior del 2016 es de 96.030.500 dólares, pero con el capital y losintereses devengados el saldo pendiente de pago sobre la recuperación es 119,080,662 millones dólares.

Bajo el Contrato de las Notas 2016 la falta de pago de intereses constituye un caso de incumplimiento. En caso de incumplimiento se activan las disposiciones que establecen un las clausulas de garantías.

La empresa celebrará una conferencia telefónica con inversionistas para discutir los casos de incumplimiento, los acontecimientos económicos y de mercado que conducen a la actual situación financiera de la compañía, los esfuerzos realizados hasta la fecha para reducir costos y mejorar su situación financiera y las perspectivas de incertidumbre económica y de mercado.
La compañía también presentará las posibles estrategias de resolución.
.
La convocatoria comenzará a las 9 am hora del este el viernes 18 de noviembre de 2011.
.
Las partes interesadas pueden escuchar la conferencia en vivo llamando al 1- (888) 566-7603, código de acceso 8839262. Llamadas internacionales pueden participar llamando al 1- (630) 395-0351, código de acceso 8839262. Una grabación de la llamada estará disponible en 1- (866) 407-9273 código de acceso de 1914 hasta el 25 de noviembre.

Por favor, dirija cualquier pregunta o comentario relacionado con este comunicado de prensa a los inversores de Cap Cana, el departamento de relaciones, dirección de correo electrónico:

investor.relations @ capcana.com, o llamando al (809) 695-5501, ext. 3818 / 3412.

Acerca de Cap Cana

Cap Cana tiene 30.000 hectáreas. Es un proyecto inmobiliario de lujo situado en el extremo oriental de la República Dominicana, en el Caribe.Está en pleno funcionamiento con instalaciones de golf y yates, un hotel de clase mundial, playas de aguas cristalinas, una gran variedad de restaurantes y establecimientos comerciales y numerosos servicios.

Desde el año 2002, Cap Cana ha invertido aproximadamente $ 800 millones en infraestructura y otras mejoras, y ha firmado contratos con un valor agregado de aproximadamente $ 1.5 mil millones para la venta de aproximadamente 1.500 unidades de bienes raíces.

A lo largo de este período, Cap Cana ha entregado más de 700 propiedades inmobiliarias a los compradores, incluyendo muchos hoteles al por menor y de desarrollo, condominios y villas. Para obtener más información, visite www.capcana.com.

Este comunicado de prensa incluye declaraciones prospectivas que reflejan la visión actual de Cap Cana con respecto a eventos futuros. Estas declaraciones prospectivas se basan en estimaciones y suposiciones hechas por Cap Cana que, aunque cree que son razonables, están sujetas a ciertos riesgos conocidos y desconocidos e incertidumbres.

Todas las declaraciones prospectivas contenidas en este comunicado de prensa están calificadas en su totalidad por estos riesgos, incertidumbres y otros factores. Se recomienda no depositar una confianza indebida en estas declaraciones prospectivas, que sólo se refieren a las fechas. Renunciamos a cualquier obligación o responsabilidad de actualizar o revisar públicamente ninguna declaración a futuro contenida en este comunicado de prensa, ya sea como resultado de nueva información, eventos futuros u otros. Eventos o circunstancias futuras podrían causar que los resultados reales difieran materialmente de los resultados históricos o de los anticipados."


7dias.com.do

Fuente: http://www.7dias.com.do/app/article.aspx?id=110623