The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A Texan billionaire who last week hit the headlines with a $6 billion energy deal has struck an ‘agreement in principle’ to purchase the Chub Cay resort development in the Berry Islands.

Tribune Business can reveal that 77 year-old George H. Bishop, the founder and chief executive of GeoSouthern Energy Corporation, has agreed commercial terms with Scotiabank (Bahamas) to acquire the property, which has been “in limbo” for more than six years.

Sources familiar with developments, and who confirmed Mr Bishop as Chub Cay’s intended purchaser, said the necessary legal documents to close the deal still had to be drawn up, while government approvals were also outstanding.

“There is a potential deal that is being worked out for the island,” one source confirmed. “It’s obviously subject to government approval.

“There is a deal in principle. It’s early days, and has to be property documented, but the basic commercial deal has been struck, subject to government approvals and full documentation.”

Scotiabank (Bahamas) took possession of the Chub Cay project in 2009, after its original developers - the Florida trio of Walter McCrory, Bob Moss and Kaye Pearson - defaulted on the $45 million loan they received to finance the construction build-out.

The bank appointed Craig A. ‘Tony’ Gomez, the Baker Tilly Gomez accountant and partner, to act for its as Chub Cay’s administrator. He is understood to have been working with Chub Cay’s existing homeowners to maintain the property, and keep it operational, during the search for a buyer.

Mr Gomez declined to speak on the Bishop purchase when contacted by Tribune Business on Friday, telling this newspaper: “Absolutely no comment at this time.”

However, sources familiar with the Bishop deal described it as an excellent development, both for Chub Cay and the wider Bahamas, as it holds out the prospect of reviving a project that generated much construction employment in the Berry Islands and North Andros.

“This is good news, because the island has been limping along,” one contact said. “There’s quite a wealthy group of property owners there, working with the bank to keep the place open.

“Any kind of sale is good news, but it’s a very, very wealthy person buying the island.”

An article published in Forbes magazine last week estimated Mr Bishop’s net worth as being in excess of $4 billion, after he announced the sale of certain Texas-based oil and gas interests to Devon Energy for $6 billion in cash.

While some $1.5 billion of that sum is to go to private equity giant Blackstone, Forbes reported that the remaning $4.5 billion would be retained by Mr Bishop’s GeoSouthern Energy Corporation.

Mr Bishop founded the Woodlands, Texas-based firm in 1981, having started his career in the oil and gas business in the 1970s.

Tribune Business was told that he happened on Chub Cay, and its potential purchase, by chance. Sources said Mr Bishop was passing through the Bahamas on his private yacht/boat, when he stopped at the island to refuel.

A conversation with the refuelling/marina manager informed him that Chub Cay was for sale, and Mr Bishop asked to be taken on a tour of the 800-acre property and wider island.

His interest aroused, Mr Bishop reportedly asked who the vendor was, and he was told to speak to Scotiabank (Bahamas).

Tribune Business back in 2009 detailed how Scotiabank (Bahamas) initiated legal action in the south Florida courts to enforce its rights against Messrs MrCrory, Pearson and Moss, specifically in regard to the $4 million personal guarantee they gave for the $45 million loan.

The action, which ultimately resulted in Scotiabank (Bahamas) taking possession of Chub Cay, noted that the project consisted of a 20,000 square foot clubhouse, 110-slip marina and vacation villas and other residences.

The bank alleged that the original developers ceased making payments on the loan facility in July 2007, with construction also ceasing that month.

And Scotiabank (Bahamas) further alleged that, at December 2008, the Florida-based trio owed it some $44.011 million in unpaid principal, plus interest, costs and expenses.

It estimated then that a further $38.6 million investment was needed to complete Chub Cay, which to this day remains an “unfinished” project.

Messrs MrCrory, Moss and Pearson had aimed to refinance their $250 million project, bur ran headlong into the global ‘credit crunch’, which dashed their prospects of success.

Mr McCrory told this newspaper at the time that after pumping $16 million into Chub Cay, they had been relying on real estate pre-sales - a market that completely dried up - to finance the remaining build-out.

Mr Bishop, though, is likely to be seen as a man who can do just that, given the considerable means and ‘deep pockets’ he has access to.