The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunmedia.net

Prime Minister Perry Christie says he has warned the China Export-Import Bank that the Government will not compromise its position that Baha Mar’s Bahamian contractors must be paid the total $74 million owing to them.

“My concern has been very clear; one, that construction resumes as quickly as possible,” Mr Christie said of the Government’s position. “I impressed upon them [the bank] that there is to be no compromise on paying the Bahamian contractors, who are owed significant sums of money, on a dollar-to-dollar basis.

“Three, that if we are able to be certain when construction will resume, the Government of the Bahamas, on the basis that we would be reimbursed in part or in whole, would then move to be able to cause the people who are unemployed to become employed.”

Mr Christie added: “We have been very clear in our commitment to make that happen. We do know that they have asked for a period of time that I think is about to reach.

“It is very clear that there has been an unusual amount of interest on the part of operators of resorts and casinos. We continue to wait and to watch, but we do know that a decision must be made imminently for this to go on, and we expect it to be made imminently.”

Mr Christie’s comments emphasise how little control and influence the Government now has over Baha Mar’s fate, which is being decided in Beijing between the China Export-Import Bank (as secured creditor) and the numerous investor groups seeking to take over and/or operate and complete the $3.5 billion project.

Mr Christie said he was “very impressed” by the calibre of groups and hotel operators vying to take over the beleaguered development, among them Sir Sol Kerzner’s group as well as Chinese operators.

Sir Sol, the former Atlantis and Kerzner International chief, has partned with Andrew Farkas, the Island Global Capital head, in a bid to take over Baha Mar’s completion, opening and operation. Mr Farkas and his company had previously been appointed by China Construction America (Bahamas) as their restructuring and financial advisory agent over Baha Mar.

Tribune Business sources close to the situation have suggested their greatest competition is likely to come from China. One Chinese group was said to have partnered with the international resort and casino operator, MGM, to make an offer for Baha Mar.

One contact, speaking to this newspaper on condition of anonymity, said the MGM-tied group had been approached by the China Export-Import Bank itself. The bank, Baha Mar’s $2.45 billion secured lender, has been trawling its Chinese and Asian contacts for potential investor groups that could take on Baha Mar.

“There are apparently three to four groups that have shown their cards,” the source said. “The Chinese are more interested in the casino than the hotels.”

While Sir Sol’s group would likely find favour with the Government, due to their previous relationship and his track record (established with Atlantis) in owning and operating mega destination resorts in the Bahamas, it is possible the China Export-Import Bank may be more comfortable looking closer to home.

And, while Western-leaning investor groups would likely shy away from seeking to purchase Baha Mar, due to its already-high debt load, a Chinese bid may have no such hang-ups.

Chinese investors tend to take the long-term view, and the source said of the MGM group: “They would come in with equity. What they were going to do at the end of the day was take the debt load off that property.”

Mr Christie, meanwhile, stopped short of predicting that Baha Mar’s construction would resume before year’s end, even though the situation was being closely monitored by the credit ratings agencies.

“Standard & Poor’s downgraded the Bahamas primarily because of this. Moody’s held the line,” he added of Baha Mar. “Moody’s, in holding the line. obviously had the same feeling that I had; that it is only a matter of time before construction resumes to complete the resort.

“They watched the fact that Hyatt didn’t go anywhere and, even when Rosewood left, Hyatt and SLS remained. It’s a sign that the companies know sufficient and want to be here. They also now know it has excited a lot of the big players in the world, resort and casino businesses wanting to come here. There is confidence in the Bahamas, and confidence in what this property could be.”