The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A former Baha Mar director yesterday said the prospects of Bahamian creditors being made whole “diminish with each passing day”, and added: “They are going to get screwed all the way.”

Dionisio D’Aguilar told Tribune Business that it was ‘ludicrous” that the $50 million financing for the Baha Mar receivership had come from another Chinese state-owned entity, rather than the China Export-Import Bank as secured creditor.

Suggesting that the Chinese were employing “a lot of smoke and mirrors” relating to their plans for Baha Mar, Mr D’Aguilar suggested that neither the bank nor any purchaser of the $3.5 billion development was likely to be interested in paying Bahamian creditors 100 per cent of what they are owed.

He likened the $74 million-plus owed to Bahamian contractors, and the sums due to other Baha Mar vendors and the 2,000 laid-off employees as “a crime” that was unlikely to be solved.

“It seems ludicrous to me that one entity owned by the Chinese government should be lending, and putting money into Baha Mar, to take preference over another government entity,” Mr D’Aguilar told Tribune Business.

“I think it’s a lot of smoke and mirrors, and I wouldn’t be surprised if the new purchaser of Baha Mar was a Chinese company, which is really a face-saving mechanism.

“Today it’s owned by the China Export-Import Bank, tomorrow it’s owned by the China Harbour Engineering Company (CHEC), but, at the end of the day, it’s still owned by a Chinese entity.”

Mr D’Aguilar was speaking after Tribune Business revealed last week that CHEC, rather than the bank as secured creditor who had petitioned for the receivers’ appointment, provided a $50 million loan to finance Deloitte & Touche’s activities.

Apart from adding a further encumbrance over Baha Mar’s assets, the $50 million loan not only has to be repaid but has a preferential position over even the China Export-Import Bank’s $2.45 billion debenture.

The effect of all this is to drop Bahamians further down the Baha Mar creditors queue, and Mr D’Aguilar told Tribune Business: “It’s a crime that so many Bahamian companies are being screwed, and I hope whatever the eventual outcome is, they [the Government] do something about it.”

There have been suggestions that the Government may announce an ‘early Christmas present’ within the week in the form of a Baha Mar deal and resolution, but Mr D’Aguilar said the Government’s provisional liquidation strategy remained very much on trial until that happened.

“I think every day that goes on, the possibility of Bahamians being made whole diminishes significantly, and they know that - the contractors and other people owed money,” he told Tribune Business. “I can tell you one thing. Bahamians are going to get screwed all the way.

“Whoever buys the hotel will probably not give a damn about who’s owed money, and see it as the bank’s problem. The bank’s not going to pay them off; period.

“If it’s the Chinese government buying it, or a Chinese entity, I can’t see them giving a hoot about Bahamian contractors. They’re just trying to get the best out of the deal.”

Mr D’Aguilar’s comments contradict Prime Minister Perry Christie’s public statements, which have repeatedly promised that the Government remains steadfast in requiring that all Bahamian creditors be made whole as part of a Baha Mar solution.

But Mr D’Aguilar yesterday questioned whether a Chinese owner of Baha Mar would understand the Bahamas’ US-oriented tourism market.

While it could “buy the management”, he argued that it would be unable to deliver the passion of a developer such as Sol Kerzner or Sarkis Izmirlian.

And the former Baha Mar director expressed concern that the Government was “putting all its into one basket” with the Chinese when it came to foreign direct investment (FDI) and control over key Bahamian economic assets.

“The Chinese are the only ones investing, and the Government is going along with it,” Mr D’Aguilar said, pointing to their involvement at Baha Mar, the British Colonial Hilton, Bay Street, the North Abaco Port and Hutchison Whampoa’s investments in Freeport.

“Unfortunately, the Government has put itself in the middle of this [Baha Mar], and I hope this was a good move for their sakes, but I don’t think so. There’s no happy ending, especially for our people owed money.”