Word: frasers
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...Charles E. Fraser was a Yale-educated lawyer who knew little about real estate, but he did know Hilton Head Island, S.C. His father owned land there, and Fraser was convinced that the alligator-infested island could be turned into a playground for the sports-minded rich. So he borrowed from an insurance company (pledging as collateral pine trees that could be turned into valuable pulpwood) and began developing the 4,500-acre Sea Pines Plantation. It became a world-renowned resort that respected the environment -the pine trees are still standing, and the 'gators and a host...
...Fraser, however, borrowed heavily to finance these schemes. Then the U.S. real estate market crashed in the mid-1970s, interest rates on Sea Pines' loans shot as high as 16%, and the company found itself seriously overextended. During its last two fiscal years, Sea Pines Co. has suffered losses conservatively estimated at $35 million (figures are not yet complete for the twelve months ended Feb. 29). Once a master builder, Fraser has been furiously pruning his company in hopes of avoiding bankruptcy. Even so, he admits that there is "a 25% chance" that Sea Pines will have to seek...
Always a big spender when times were good (he once had four writers at work on four separate official histories of his young company), Fraser has turned uncharacteristically frugal of late. He has fired the gaggle of Harvard M.B.A.s who flocked to Hilton Head in the early 1970s. In order to reduce Sea Pines' towering debt, he has sold Palmas Del Mar-taking a $13 million loss -and deeded back to the lender the North Carolina tract where he planned to build the Nantahala/Heritage Park. He has also shelved plans for several smaller resorts where "almost any member...
Stretched-Out Payments. Fraser now is trying to persuade some 30 banks, real estate investment trusts and savings and loan associations to accept a stretchout of payments on Sea Pines' debt (now down to $110 million from a high in 1974 of $280 million). He plans a three-to four-year halt in new development projects, while striving to increase profits from operating resorts at Hilton Head and Amelia Island, Fla. The strategy seems to be paying off. In the first two months of the current fiscal year, which started March 1, revenues from Sea Pines Plantation were...
...Fraser recognizes that persuading the lenders to go along with a refinancing plan will not be easy. Also, he is involved in a damaging dispute with Arab investors. In 1974 the Kuwait Investment Co. hired Sea Pines Co. to oversee a planned $200 million development on Kiawah Island, S.C. Fraser had counted heavily on receiving up to $300,000 annually in profits from the project for the next two decades. But last month the Kuwaitis abruptly canceled the contract and sued Sea Pines for $1.3 million, claiming overcharges. Sea Pines is countersuing for $13.6 million, asserting that the Kuwaitis used...