A deal to sell White Sands Hotel has fallen through after receivers pulled out of negotiations with a preferred buyer, The Royal Gazette has learned.

The latest development has dashed hopes that the hotel would re-open in time for the height of the summer season.

The Paget property has been closed since March when Bank of Butterfield called in the receivers after American owner James M. Dwyer failed to keep up loan payments.

Official receivers PricewaterhouseCoopers had selected one overseas buyer as preferred bidder, but decided within the last month that the potential purchaser did not have the expertise to run the Paget property and pulled out.

In April, receiver D. Geoffrey Hunter said he hoped to announce the new buyer by early May and anticipated the hotel being open for business by June.

He told The Royal Gazette yesterday the hotel has been re-advertised, including an advertisement in the Wall Street Journal, and that he had now narrowed the field down to six potential purchasers - three local and three from overseas - whom he was confident had the ability to close a deal.

And he said some were looking at renting out some of the holiday apartments for short-term leases to residents on a temporary basis before the hotel returned to full-time operations.

But all potential buyers are committed to reopening the property as a full-time hotel, he said.

"The party that we were initially dealing with didn't satisfy our requirements and we had to go back and went back to the other potential purchasers," said Mr. Hunter.

"They didn't have enough experience to operate a hotel in Bermuda. We have narrowed the purchasers down and we have limited it to purchasers who have demonstrated an ability to close a deal, and we hope to have closed a deal by June 30."

Mr. Hunter said he had extended the overseas marketing to the Wall Street Journal in a bid to attract a better price for the 32 room South Shore hotel.

Staff at the troubled hotel spoke out in March after they had not been paid since December. They said they had run out of patience with New Jersey-based Mr. Dwyer whom they had been unable to contact despite repeated attempts.