Yellowknife (May 07/04) - The Explorer Hotel's new owner plans a $2.5 million renovation for its newest property.

"We plan to make it Yellowknife's premier hotel for business travellers," Doug Cox, president of Nunastar Properties Inc., said after the sale was announced earlier this week. Grandfield Pacific Inc. shareholders agreed at a special meeting in late April to sell the Explorer for $6.35 million to Nunastar, which held a $2.7 million mortgage on the hotel.

An information circular to Grandfield shareholders said the sale was forced by high interest rates, increased competition in the Yellowknife market, cash flow problems, and an unsuccessful bid to restructure debt.

"The only option is to sell," the circular said.

Money problems have been constant since 2001, the circular indicated, and noted that the Explorer is 30 years old and needs significant upgrades and renovations to remain competitive.

Nunastar takes possession of the hotel later this month and will begin renovations this summer, Cox said.

The Edmonton-based company has extensive holdings in the North, mostly in Nunavut, including the Frobisher Inn in Iqaluit.