The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Five more senior Baha Mar executives have been terminated from their posts with the $3.5 billion development, providing further evidence there is no imminent resolution to the project’s plight.

Tribune Business can reveal that Baha Mar’s receivers have released the property’s top human resources executives, including Kristin Wells, the director of Baha Mar Academy, its training and recruitment.

Also departing are Magdalena Hamya, Baha Mar’s vice-president of human resources and organisational development, plus two other executives, one of whom was the personnel chief at the development’s SLS Lux property.

The final termination is Nik Leuenberger, the top management executive at the Baha Mar Hotel and Casino. He has been removed from his post as senior vice-president of resort operations.

Tribune Business sources close to developments said the five executives, who were all terminated last week, received no redundancy or severance packages. Instead, they have been told to join the Baha Mar creditors’ queue and wait to see if they will receive what is due to them.

One contact familiar with Baha Mar, and its current standstill, said the latest terminations again contradicted the rosy impression given by Prime Minister Perry Christie that progress was being towards a resolution.

They pointed out that the resort and operational knowledge held by the released executives, most of whom would be relied upon to train and put together a new workforce, could be vital to any Baha Mar purchaser.

Their departure, the source added, was further confirmation that sealing a deal with a new Baha Mar purchaser/owner remains months away.

Speaking on condition of anonymity, the source said: “The receivers just terminated another bunch of people at Baha Mar. All the human resources executives and the guy running the casino hotel. I think there are five of them. 

“This flies in the face of what Christie has been talking about in terms of a quick turnaround. They will need these people to do the jobs that they do for that. It flies in the face of the optimism that Christie has been speaking about. The timing is just ridiculous to me.”

Raymond Winder, Deloitte & Touche (Bahamas) managing partner, declined to comment when contacted by Tribune Business.

However, sources close to the receivership team, comprising Mr Winder and two Hong Kong-based Deloitte & Touche partners, confirmed the terminations of the five named executives.

They cautioned, though, against reading too much into the move or connecting it to efforts to find a purchaser for the $3.5 billion Cable Beach-based property.

Tribune Business was told that the terminations of the five senior Baha Mar executives had been pending for at least two months, but the receivers only got around to acting last week, having been focused on higher priority issues.

Given that no Baha Mar purchase, and re-opening, is in sight for the foreseeable future, the receivers have probably elected to save several hundred thousand dollars in salary by the latest terminations.

With just a ‘skeleton staff’ of several hundred managing Baha Mar, there was likely little for human resources professional to do, making their salaries an unjustifiable expense.

However, another well-connected Baha Mar source said: “These are senior human resources people responsible for training and hiring of people. They have in-depth knowledge of the hotel.

“This clearly signals there’s no chance of a quick resolution. They would not be telling them to otherwise. If you were a purchaser, you would have those people in place: ‘Let me know what I need’.

“This knocks the possibility of finding a buyer to move ahead as quickly as possible. They need these guys in place to get this property up and running quickly,” they added.

“You can’t fire all of these guys and say we’re going to have a quick resolution to this deal, especially letting them go at this late stage.’

The source said the loss of Mr Leuenberger, in particular, was a blow given his experience and credibility with the global hotel industry.

“That guy came from a huge hotel up in Switzerland, one of the best hotels in Europe, to come here,” they said. “That’s going to leave a bad taste across the tourism industry.”

The Prime Minister has continued to dangle the prospect of a quick resolution to the Baha Mar saga, telling reporters last week that the Government would be meeting “very  high ranking persons from China” to discuss the situation during the Inter-American Development Bank’s (IDB) Board of Governors event.

He, and other Government officials, have also pinned their faith on talks being held between Baha Mar’s financier and main contractor, the China Export-Import Bank and China Construction America (CCA), about resuming building work at the project.

However, given that both are Chinese state-owned entities, any decision will likely involve the Beijing political directorate. And given the complexity of China’s decision-making structure, any resolution may take time to achieve.

The receivers, meanwhile, have hired Canadian-headquartered Colliers International, a real estate firm with global reach via its more than 60 worldwide offices, to market Baha Mar to all prospective purchasers.

They have opted for an open, transparent sales process where all bidders will have access to the same information via an electronic data room. This is designed to ensure that all are on a ‘level playing field’ when it comes to due diligence.

And, by inviting all-comers to bid, they are also seeking to dispel any notion that the $3.5 billion project will be sold via a ‘back room deal’.

Many observers have privately stated their belief Baha Mar was being reserved for a Chinese buyer, such as the Fosun Group, given the China Export-Import Bank’s ‘impossible demand’ that it recover its full $2.45 billion outlay on the project.

Fosun, the Club Med and Cirque de Soleil owner, together with the Sir Sol Kerzner and Andrew Farkas joint venture, will now have to join all other bidders in a process that appears designed to alleviate the latter’s concerns about an absence of due diligence information.