The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A former Baha Mar director yesterday suggested the Government was “a little shocked” that its help in defeating developer Sarkis Izmirlian had yet to be rewarded by the China Export-Import Bank.

Dionisio D’Aguilar, speaking after the Supreme Court granted the Government’s request to stay its Baha Mar winding-up petition until February 1, 2016, said Prime Minister Perry Christie was “clutching at straws” over the $3.5 billion project’s fate and that of Bahamian creditors.

He added that the Government’s “neophyte politicians” were now discovering how business was conducted, and that the Chinese bank “doesn’t give two hoots” for the impact the ongoing Baha Mar crisis is having on the Bahamas and its people.

Arguing that the China Export-Import Bank, as the project’s $2.45 billion secured creditor, was only concerned for its ‘bottom line’, Mr D’Aguilar said the latest developments suggested it had decided not to finance Baha Mar’s completion.

He, and other contacts spoken to by Tribune Business yesterday, suggested the latest ‘winding-up’ petition delay was revealing for a variety of reasons.

Apart from indicating that the China Export-Import Bank is not close to concluding a deal with a Baha Mar purchaser, or operator to take over its management, Mr D’Aguilar implied that the February 1 extension was intended to ‘cover up’ the Government’s failed strategy.

“I’m always confused as to why they rushed to bring it here to go through the liquidation process, and then they constantly delay it,” Mr D’Aguilar told Tribune Business of the Government’s actions.

“There’s no doubt that the Government is never going to admit they made a mistake. I guess time will tell whether something comes from this.”

Both the Prime Minister and several Cabinet ministers, in the wake of Baha Mar’s June 29 filing for Chapter 11 bankruptcy protection, insisted that bringing the dispute ‘back to the Bahamas’ and placing it into joint provisional liquidation was the fastest, most cost effective route to getting the $3.5 billion project completed and open.

The move was designed to ‘squeeze’ Mr Izmirlian, and force him to change his strategy such that he would return to the negotiating table on the Government’s/Chinese terms.

That did not happen, and the Christie administration’s actions in seeking repeated extensions to the winding-up petition hearing further indicate it was a tactical negotiating ploy that failed to achieve the desired result - a speedy resolution to the Baha Mar dispute.

The impasse, in terms of getting the $3.5 billion project completed and open, appears no closer to resolution than when the simmering tensions between Mr Izmirlian and China Construction America (CCA) re-erupted in February - some nine months ago.

Implying that Mr Christie was seeking to place a ‘positive’ public relations front on the latest Baha Mar developments, Mr D’Aguilar told Tribune Business: “When he talks about getting Bahamian contractors paid off, and everyone made whole, he doesn’t have a clue what he’s talking about.

“He’s just clutching at straws, trying to keep people under the misguided impression that he’s in control of this.”

Mr D’Aguilar said that while the China Export-Import Bank was likely hearing constantly from Mr Christie as to what the Government wanted to happen, it was obvious that the former - and not the administration - was now in complete charge of Baha Mar’s fate.

He suggested that the Government was becoming increasingly frustrated, both by China Export-Import Bank’s failure to yet determine Baha Mar’s future, and its lack of influence/control over the process.

“I think the Government is surprised that the bank has not popped up and said: ‘Let’s get this finished’,” Mr D’Aguilar told Tribune Business.

“I think they’re a little shocked that the bank didn’t rise up and join hands with the Government and say: ‘Now we’ve won that victory, bringing the process to the Bahamas, let’s work together to finish the project’. The bank has not done that.

“The bank is the bank. They’re not going to do anything to benefit the Commonwealth of the Bahamas. The bank will benefit the bank.”

Mr D’Aguilar said that of the three options facing the bank - selling off Baha Mar immediately, or financing its $600 million construction completion costs, and then either selling it or finding an operating partner to manage the property - the current position, and actions, suggested the former.

He added that “they’re clearly not going to put the money into finish it”, and suggested the only purchaser of such a debt-laden, unfinished project was likely to be a Chinese investor group, seeking to obtain favour with the Beijing government, and which would be repaid for making the China Export-Import Bank ‘whole’ with concessionary interest rates on future loans.

“When you try to sell a distressed asset, it’s going to take an enormous amount of time to do that,” Mr D’Aguilar said.

“The bank is going to have to come to terms with the new buyer. Time is on the side of the purchaser, and they will try to drag this out as long as they can to cause the asset to deteriorate, so they can get a better price.”

Mr D’Aguilar said the Christie administration could now do nothing but wait on the China Export-Import Bank to determine Baha Mar’s future.

“These are neophyte politicians finding out that business is business, and the bank is only interested in the bank and realising the most for that asset,” he told Tribune Business.

“The bank doesn’t care about infinite things like the Commonwealth of the Bahamas and looking after the people of the Bahamas. That’s not its job. Banks look out for their bottom line. That’s their sole purpose.”