Claims against TUI from UK Tourists

Many of our shareholders will have seen news reports of the claims being made by a large number of UK-based holiday-makers who have booked into Cape Verde Resorts through TUI. It should be made clear that the specific claims and reports seem to refer to the RIU resort controlled by TUI, and the resorts managed by TRG are not mentioned in the reports the Directors have reviewed.

That having been said, during the Directors’ meetings with TRG senior management in March, we did discuss this matter.  It is the case that when similar reports were circulated in February of this year, they had a significant negative impact on the TRG resorts - even though they were not specifically responsible for the cases mentioned.  It seems that the holiday-makers in the UK are not easily able to distinguish between resorts in Cape Verde, and so when hearing negative news a large number cancelled bookings.  This was a relatively short-lived phenomena at the time, and quickly bookings recovered.  However, repeated news stories of this nature are likely to negatively affect TRG.  The Directors were able to secure confirmation from TRG that a number of actions have been taken to ensure similar incidents do not occur in their resorts.  This included the installation of new ice-machines controlled in-resort so that ice quality can be controlled by hotel management.  The Directors were able to see the new machines in operation  first-hand.  We also received reassurance from senior management that water handling policies had been improved to reduce the reliance on :”grey-water” in watering plants and gardens, as an example.

Shareholders will be reassured by the following which specifically relate to properties owned by the companies (an not to other investors on the resorts) as a result of the improved rental agreements negotiated:

1. The Companies retain an investment reserve to support her investment in infrastructure that improves the quality and value of properties and facilities owned by the Company.  This facility is being made available to support any reasonable investment proposals made by TRG including health and water related improvements.

2. Properties owned by the Company benefit from fixed income per month regardless of any fall off in holiday-maker revenues, and so are not directly affected by such revenue fluctuations.  (Other investors receive a profit share from room ownership and have to pay BRM Fees separately for hotel improvements so are likely to be negatively impacted by any issues arising from this).

We hope that shareholders are reassured by this interim update.  A full Property Report for each Resort is being prepared, but the Directors wished to make an urgent statement given the recent news to provide reassurance.