Edwin Richards, boss of £10 million shell Nettec, has negotiated a reverse takeover by Canadian and Caribbean resort developer Newfound.

Final terms have yet to be hammered out, but the deal will see fallen dotcom star-turned-cash-shell Nettec, now tightly held by founder Jeremy White, activist investors Acquisitor and Steel Partners among others, issue shares to Newfound. Newfound, headed by Canadian entrepreneur Brian Dobbin, is developing the 2,200-acre Humber Valley luxury resort by the Humber River and Deer Lake in Newfoundland.

As yet, 132 chalets have been built there, out of 380 planned, on plots Newfound aims to sell to holidaymakers for upwards of £200,000 each. With a golf course, yacht marina, facilities for skiing and winter sports, the chalets will offer buyers not only holiday use but the possibility of serious capital appreciation, enthuses Richards, a former private equity specialist at UBS.

The new company intends to make money by first selling the plots and then running the resorts. Newfound also has projects at St Kitts and Nevis in the Caribbean and Nettec, still with £10 million in the bank, has also agreed to lend £3.7 million to create a Humber Valley-style resort at Nevis.

Nettec shares, which traded above 110p seven years ago, have been suspended at 13p. Shareholders can only hope the Newfound deal, once finalised, could point the way to sustained recovery.

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