The Tribune

EDITOR, The Tribune.

BAHA MAR - Provisional Liquidator appointed with limited authority, simply it seems to ensure that the owners cannot dissipate the assets.

Who shot John in the Baha Mar story covers the broad spectrum of our political scene... initially a very much Christie concept it seems after Izmerlian was persuaded to purchase from Ruffin ($167m) then acquired the old Radisson Hotel from Government ($40m), but everyone seems to forget that within 3-4 years Izmerlian was back against the wall and his bankers, Scotia, were treading closer to foreclose. We saw evidence in that when the final deal with EXIM was hatched. Scotia took in lieu seemingly of the $200+million owed equity in Baha Mar Limited. The project was on a quick sand footing then.

Surely the Government already knew that the developer was in financial trouble. Why didn’t they then put everything on hold and avoid what we now experience?

I recall that there were 2-3 international hotel people interested, who either alone or in a consortium could have redeveloped Cable Beach and we would have had over the past two years, the projected 8,000 employed and all the benefits of the revenues. No - the political agenda had to hold... “he” did that one, I am going to do this “one”!

In the Baha Mar deal, remember China State Construction took an Equity position, $167m - Hyatt Hotels took a further equity of $45m, and then Morgan’s and Rosewood took $10m each, plus do not forget Scotia put in lieu of setting debt a further $200m ...total - equals $432m.

The most significant issue that came out of the petitions, was what Rosewood found through a critical search of the Public Registry - the land, previously leasehold to the Crown, has not been transferred as fee simple (freehold) to Baha Mar Limited.

I checked the creditor list and do not see that the Bahamas Treasury has made any claims for unpaid lease. Question: Has by an extraordinary chance Baha Mar Limited, paid the leasehold over the past four years or are there leasehold arrears pending?

Even if Izmerlian is able to renegotiate the loans and debts - will $400m be enough? They already spent $17m on pre-opening marketing. Most of that was Government money - Baha Mar will have to be re-branded... the name is now so negative... even the New Riviera is so lacking of imagination. Do we want to be the new Riviera? Copying is so lacking of imagination and creativity. What is Baha Mar? Name it that!

Onward I regret Izmerlian, without $5-600m will not survive. So I suggest to bite the bullet and find a new Capital Investor Group, who will find the best of the best hotel managers and operators, and then you will reincarnate what is quickly becoming a massive white elephant. Potential time-frame could be much less than how long the courts will take.

Is Izmerlian in so many breaches of his Heads of Agreement that Government can easily and legally simply call it in? Surely Mr Christie must be considering that option – it is logical and constructive under the circumstances.

Hoping sense prevails, but based on the past misreading, I seriously doubt it as politics is a major cancer in the decision making on this one. Personal esteem - upcoming General Election 2017 - crime - unemployment - no investor interest.

T RUSSELL

Nassau,

September 5, 2015.