By RASHAD ROLLE
Tribune Staff Reporter
rrolle@tribunemedia.net
IN a letter sent yesterday, Baha Mar developer Sarkis Izmirlian asked the president of the China Exim Bank to accept his offer to complete and open the stalled resort, promising to rehire Bahamian employees while ensuring that the bank does not accept a discount on its debt.
Mr Izmirlian’s offer would also ensure that unsecured creditors, many who are “suffering in the Bahamas,” would be paid.
The letter was a follow-up to the offer he made to the bank on January 11, to which he said he received no response.
The terms of the offer have not been publicly disclosed.
Mr Izmirlian sent yesterday’s letter following what he called a “positive meeting” with Prime Minister Perry Christie last week.
“Our goal in structuring the offer was to make sure that Exim would not be required to take a discount, or ‘haircut,’ on its debt which we have been told repeatedly is an important goal of the bank,” he wrote.
“Our offer stands, and we are prepared to invest the further funds necessary to open Baha Mar. Last Friday, I met with Prime Minister Christie, and I reiterated my interest to make Baha Mar a successful reality, including addressing the needs of all the creditors. With our offer, there is no reason to allow the property to continue to linger, to become further distressed, to incur further layoffs of capable team members needed to open Baha Mar, and to delay the re-employment of so many well trained Bahamians.”
A formal sale process for the $3.5 billion project began last month, when Baha Mar’s court appointed receivers hired a Canadian real estate firm to market the project to potential buyers.
Mr Izmirlian dismissed that sale process as “opaque, fraught with obstacles and irregularities,” and one “not designed to maximise value for all.”
“There is great concern that serious and experienced bidders are being driven away by the process,” he wrote. “I don’t believe that is the goal, nor the moral standard that you have established for the bank and therefore offer again for my team to meet with you.”
In a press statement about his offer, Mr Izmirlian stressed that no other potential owner has the same goals as his team does for Baha Mar - nor the expertise and commitment to move the project forward.
“It is unfortunate what has happened to Baha Mar these many months, but all of this is correctable,” Mr Izmirlian said. “We are confident our offer is the right solution. We know we can make Baha Mar successful. We want all creditors’ economic interests to be addressed fairly. We want former Baha Mar employees to be able to be back at work.
“While we will continue to fight the ill-advised winding up/liquidation through the courts, following a positive meeting last week with Prime Minister Perry Christie, we hope to work with him towards our shared goal of opening Baha Mar rapidly and successfully for the benefit of all Bahamians, especially our highly trained Baha Mar team members.
“We are prepared to move forward immediately with Exim Bank on our offer. Time is of the essence,” he stressed.
Best option
When contacted for reaction, opposition Deputy Leader Peter Turnquest said that of all possible buyers, the developer would be in the best position to complete the project, given his familiarity with what remains outstanding and his relationships with local and international parties relevant to the project.
He noted that relationship building between Mr Izmirlian and the EXIM Bank would be important, given the complicated relationship they have had during the very public debacle facing Baha Mar in the last year.
“Hopefully the government understands and appreciates the complexity of this issue,” Mr Turnquest said.
He added that after being “disappointed with any number of alternatives,” Mr Christie may now be recognising that Mr Izmirlian is best positioned to complete the project.
Nonetheless, the Canadian-headquartered firm Colliers International was hired last month to resolve the ownership issue Baha Mar faces through a formal process.
The project is said to be 97 per cent complete though Mr Christie has said that the cost of completing the construction of the project has risen to $600 million.
Bidders are required to show “their financial capability and company background,” plus proof of funding, audited financial statements and industry expertise.
Bidders must then pay $50,000 fee to ensure access to an electronic data room where due diligence data is stored. The fee is refundable if the process is terminated before a bidder is selected.
Bidders are also required to sign a non-disclosure agreement (NDA), preventing them from contacting or communicating with “any current or former directors, officers, employees, consultants, advisers, bankers, customers, creditors, suppliers or representatives of the group, or representatives, officers directors of employees of CCA Bahamas, in connection with the sale without the receiver-managers’ written consent.”
The Supreme Court placed Baha Mar into receivership last year at the request of the Exim Bank.
Comments
TalRussell 8 years ago
Comrades while senior management at resorts come and go, we taxpayers are not so concerned. But as an one of the many investor shareholders, whose money was kidnapped by government, when the cabinet used state funds, grants properties and concessions to dump into Baha Mar's deep hole, reportedly to be in the $1 Billion dollars range, can we have answers to the following questions?
1.The 5 more senior Baha Mar executives that were terminated from their posts with the $3.5 billion development, were in fact terminated by the failed development's receivers and were not among the same executives of which Izmiarlian claims to have been personally paying?
2. That since the resort development never did get to open for business, long ago ceasing its complete operations, it would be reasonable to ask why the 5 were continued to be paid, and for what duties did the 5 perform?
3. How many other native/foreigner paid citizens remain on the receivers payroll as citizens at the former Izmirlian nation?
sheeprunner12 8 years ago
Can you imagine this???????? ............... we are coming full circle with this Bahamar debacle .............. Can you imagine Perry opening a Bahamar with Sarkis as owner .. again?????? ............. What would Perry say?????????
jus2cents 8 years ago
We should all pray they accept this amazing offer from Mr Izmirlian! I can't imagine a better solution for ALL involved, the nation and people will all benefit as well!
sheeprunner12 8 years ago
Agreed ............. this is just like the Gender Referendum ........... if Perry, Shane, Fweddy and the AG dem had not interfered with both, we would have been a better country today ............ what a country!!!!!!!!!!!!!!
TalRussell 8 years ago
Comrades couldn't you conclude that this is the same de factor leader Izmirlian who lead his self-proclaimed Cable Beach nation, down the path to a Delaware Chapter 11?
It was not the PM but Baha Mar which left thousands natives and Chinese nationals out paycheques and millions and millions dollars remaining unpaid to local suppliers and contractors - and taxpayers BEC, among others?
The Chinese are not known for having conversations with the dead spirits.
sheeprunner12 8 years ago
Tal.......... Izzie was forced into chapter 11 because of the Chinese cartel ...... but Perry should have kept his stupid azzzzzzz out of it ..... that is the issue, not Izzie's commitment for The Bahamas or his employees etc
TalRussell 8 years ago
Comrade "Trump" Sheeprunner12, if that's your story, I say don't stick with a story in which the proof gets even thinner as you're going to be faced with explaining what's in the Chapter 11 court documents?
Comrade you can't just make-up your story as you type from post to post.
sheeprunner12 8 years ago
Sooooo, how do you justify the Perry-led government hijacking an investor who put his own $800 million into Bahamar .......... if it was not for some other nefarious reason(s)????????
HarryWyckoff 8 years ago
I think you need to go read up on Chapter 11.
Had our useless government not been in the pockets of the Chinese, and had they allowed the C11 filing to proceed, Bahamar would have been open months ago, and all creditors would have been paid.
Please, educate yourself on what you're talking about before opening your mouth - it makes you look far less stupid. (and you need all the help you can get in that department)
sheeprunner12 8 years ago
Notwithstanding your insulting comment ............ you answered my question!!!!!!!!! Thank you, Harry.
HarryWyckoff 8 years ago
My comment was in reply to Tal, who does actually need all the help he/she can get in that department.
ThisIsOurs 8 years ago
Dont forget the Reply All email mistake between Sir Baltron and CCA
Godson 8 years ago
My People, The Bahamas, when will you ever learn?
Godson 'Nicodemus' Johnson
SP 8 years ago
Lol......Perry would eat a double helping of steaming horse dung if it ment he could be PM just one more time!...Lol
bahamalove 8 years ago
I say let Toggie and Bobo negotiate this deal and get Baha Mar up and running. It would be interesting to see the PM, Brave, Maynard-Gibson, Bradley Roberts, Shane Gibson and Fred Mitchell all cheesing it up for the cameras at a Baha Mar grand opening with Sarkis Izmirilian. The big question is if these government officials and the Chinese are willing to swallow their pride to accept what seems to be an offer too good to refuse. I'm sure at this point Maynard-Gibson don't care about pride because she wants to get her Baha Mar retail stores open as soon as possible. The PM clearly does not want to go into the election with this debacle hanging over his head. Thus, we may very well see the government and Sarkis kiss and makeup very soon if they haven't already. Of course the PLP are master spin doctors who will claim that the psychological evaluations they recommended for Sarkis was simply a test recommended to evaluate his genius mind.
TalRussell 8 years ago
Comrade Bahamalove. how long will it take for it to be concluded that Baha Mar was an ill-advised too massive a development approved by two governing political parties cabinets.
Maybe the Chinese will share what they soon discovered to this end before they REFUSED to pump another billion dollars bank's money into Cable Beach?
The Chapter 11 is but part of the whole story?
Is not a Billion dollars of the state's fiances, not more than enough conversation to have had about have dumping state finances into Baha Mar's sink hole?
Here's my offer to Izmirlian proposal and the Chinese. if they're indeed to rejoin as partners, do what you damn well want to do with Bah Mar, but only after the state recovers its lands, concessions and moneys.
The PLP cabinet would be right to recover the state's Billion dollars but so wrong to pump any more state's finances, lands or concessions into this Cable Beach sink hole.
sheeprunner12 8 years ago
It was the Chinese who forced Izzie to develop this project as a single phase project ........... HAI and Perry did not have the deciding factor ...... the Chinese wished for this investor's project be hi-jacked, so that they can manipulate it as they do today (for their own geo-political reasons)
bahamalove 8 years ago
The real question is where is the new money coming from with regards to Sarkis' offer? And if he has the money now to pay off everyone, why didn't he do this from the start. I'm no finance expert, but this seems like a huge amount of debt to take on even for a billionaire. There must be some silent partners involved. Nevertheless, can a finished Baha Mar generate enough revenue to pay off its debts. The economics of this project seems a bit skewed.
SP 8 years ago
Tal, your joining crawfish thinking Hubert Ingraham on this one, all head and no brain!
Anyone ignorant enough to think Sarkis didn't exhaust every possible due diligence angle better make appointment with Shame Gibson to have "their heads examined".
Given that Bahamas failed to grow its tourism product the last 40 years, Baha Mar is not too massive a development to succeed!
Fact is, Baha Mar's added accommodation and entertainment inventory is exactly what New Providence needs in order to position itself where we should be at this point in time.
What we badly need on top of Baha Mar are several small to medium properties and several more independent resort activities to increase visitor spend!
Honestman 8 years ago
Christie needs to swallow his pride and work with Izmirlian. I suspect he is the only show in town and is obviously best positioned to complete this resort IF he can be allowed to use his own contractors. Christie really needs to exert whatever political pressure he can on the Chinese to accept this offer. If what is being reported is true then the EXIM bank should jump at the deal being offered. The problem for Christie is that he may not have any bargaining power with China if he and his government have compromised themselves along the way with their hidden dealings. To be honest it says much about Izmirlian's character that he is prepared to have civil discussion with Christie given the shameful way that Christie, Gibson and Mitchell treated him. Good luck Sarkas and cudos to you for being willing to re-engage with this nest of vipers.
Economist 8 years ago
What is the China EXIM bank saying? The government put the EXIM bank in the drivers seat when the government killed the Chapter 11 proceedings in the US.
Izmirlian can write letters and the PM can meet with Izmirlian as much as they like but it is all in the hands of the Chinese and, so far, they don't seem to be particularly interested.
It is all in the hands of the Chinese.
TalRussell 8 years ago
Comrade Economist whomever the lender prospects be's,. they are going to have serious concerns about the merits for return on investment.
Does it not concern you that your state's finances, contributed $1 Billion dollars?
And, now the government is denying its own spokesman's statement, that the state did in fact spend $6 million to finish/renovate Baha Mar's Convention Center?
Look up the definition of a financial sink hole, where at the bottom sunks a Billion dollars of the state's finances, lands and concessions.
Economist 8 years ago
Tal, it concerns me very much.
Our economy is not good and, even though I have never been a fan of the Baha Mar project, I very much want to see it open with a predominately Bahamian workforce. The Chinese don't care about us. Look at what Hutcheson has done, or should I say not done, in Freeport. Hutchison should have created another 4,000 or 5,000 jobs in Grand Bahama. I hate the fact that we have given the control to yet another Chinese group who don't care about us.
TalRussell 8 years ago
Comrade Economist you don't even need a score card to keep track of how much the state has gotten back in return for the billion of moneys, lands & concessions already dumped into Baha Mar's sink hole - because its a zero financial return, or job creation return on the Billion. Zero.
The suckers didn't even pay BEC, and probably stiffed National Insurance too?
What about the $200 million 'roll-over' loan still outstanding with the Bank Nova Scotia that made the whole Baha Mar deal possible?
Good God Almighty, there are even claims that the former foreigner owner of the previous casino hotel properties, still owes millions of dollars to the state?
Comrade Economist I ask you. What s going be so different this time around?
Sorry, i just don't share your confidence.
John 8 years ago
Christie dem come to realize that Sarkis is the best fit for Bah Mar. The bank was breathing down his neck and the China Construction America Company, had plans of their own (read their article in the business section of today's Tribune). Had Perry dem not interfered and allowed Sarkis to take Bah Mar into bankruptcy, at least the project would have been completed and open by now and some 2,000 (TWO THOUSAND) Bahamians would still be employed. Whether or not Bah Mar is sustainable and will be profitable in the long run is another story for another day. The Lucayan in Freeport claims they cannot turn a profit andthe property is on the market for sale but Atlantis appears to be holding its own. I cannot see Sarkis offering the Chinese bank 100 cents on the dollar considering what they put him through and after suffering almost two years of financial losses and being the laffin' stock of the tourism/hotel industry,worldwide, and neither can one understand why the Chinese are rejecting the offer except their intention is for Bah mar not to open and be in competition with "The Pointe." In any event Christie dem on borrowed time now. For Bah Mar to get completed and be up and running before election them papers have to get sign right now, if not yesterday. Bahamians will be suspicious of any agreement or any hiring that is done too close to election..They don get fool too much times..Give Sarkis credit doe..he does have patience ...faith and endurance.. He is not giving up on his dream (and his $850 million)..God must be on his side!
SP 8 years ago
........................ Sarkis Izmirlian is a REAL man! Not just a talking head! ......................
If PM Christie and his crew of sticky fingered clowns heads were not so far up their ass's, they could learn a hell of a lot from this man!
MonkeeDoo 8 years ago
The entire PLP Cabinet and membership should bow down to this man and say thank you, thank you, thank you. There are ways that the Government can intervene in matters of National Interest - They sure intervened in matters of their own personal interests and the CEXIM Bank Interest wrapped up in the enigma of the Pointe and CCA.
http://thetribune.media.clients.ellin...">The Gordian Knot by MonkeeDoo
MonkeeDoo 8 years ago
It is amazing but one must take courage in the turnout for the RABL demonstration on Sunday. Brazil has voted to impeach its Prime Minister, Ukraine is getting rid of its Prime Minister what is wrong with the Bahamas.
BaronInvest 8 years ago
Most of you are just too passive... You can do what you want here in this country, just gotta pay some individuals while the majority just stands by doing nothing but talk...
SP 8 years ago
How and where do we sign up to for this "pay" you speak of?
BMW 8 years ago
SP you know where to sign up! This country has been for sale forever... We as a people need to do for ourselves, stop feeling " Entitled". Stop looking for something for nothing.
sheeprunner12 8 years ago
Didn't hear this kind of real talk at the COB launch the other night ....... not a word about political corruption and intimidation and kleptocracy .......... if we don't get rid of that and the Consttitution, then no need for a NDP.
SP 8 years ago
Lol.....
Well_mudda_take_sic 8 years ago
You would think Izmirlian would have enough business sense not to try take a second bite out of the rotten apple known as Baha Mar. He just needs to stop and think for one moment what impact the garbage and other refuse from a fully operating Baha Mar would have on the level of toxic fume emissions from the public dump fires. The resulting enormous increase in deadly smoke would kill half of the residents of New Providence and many of the guests who would be so foolish as to stay at Baha Mar, which is down wind from the toxic smoke on many days when the dump flares up. Any buyer of the Baha Mar property would have a valid legal claim against the sellers and their representatives/agents involved in the sale to the extent required fair disclosures are not made in the selling material and contractual agreements of the existence, effects and implications for Baha Mar of this deadly hazard. I can only begin to imagine the legal claims that would be made against the owners/operators of Baha Mar by guests staying at the property who experience serious health issues from inhaling the toxic fumes.
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