The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

PRIME Minister Perry Christie yesterday reiterated his firm belief that a Baha Mar resolution was “very close”, disclosing that Sol Kerzner had returned with a revised bid.

Mr Christie, in a swipe at his detractors, told the Bahamas Business Outlook conference that he would not apologise for his optimism that a successful Baha Mar outcome was in sight, saying: “I believe that I am very close with this.”

He added of the stalled $3.5 billion Cable Beach resort development: “People speak to my optimism. I don’t apologise for that. There is no circumstance under which the Bahamas government will find acceptable undue delays in recommencing construction towards completion.

“Some of the world’s leading companies have applied; some that will surprise you have applied to be involved. Sol Kerzner has come back with an equity fund, Mohegan Sun has applied to be involved, a lot of these people have put in bids, major Chinese companies have put in bids.”

Despite the ‘name dropping’ of potential bidders, many observers still believe the Baha Mar project is in for a long work-out, something that does not align with the Christie administration’s political agenda with a general election on the horizon by May 2017.

The window to complete Baha Mar, and get it open before then, is narrowing rapidly for Mr Christie, hence his determination to almost ‘will’ a solution in time.

The Prime Minister made clear his increasing concern at a PLP branch meeting in the Bamboo Town constituency earlier this week, during which he confirmed he had written again to Baha Mar’s $2.45 billion secured creditor.

Implying that he had again sent a ‘get a move on’ message to the China Export-Import Bank’s president, Mr Christie also said he was “running out of time” - a clear reference to the upcoming election.

However, the China Export-Import Bank’s seeming desire to recover 100 per cent of its $2.45 billion debt financing seems likely to make for a long Baha Mar sales process.

This objective does not match the goal of any Western-led investment group or buyer, which will be looking for “a deal” and the China Export-Import Bank to take a ‘hair cut’ or loss on its $2.45 billion.

This makes it highly likely that Baha Mar’s ultimate buyer will be a Chinese investor group, and Mr Christie confirmed he remains in communication with all parties essential to restarting the project.

“I’m speaking directly and often to the leaders of the China EX-IM Bank (the secured creditor), the Chinese government representatives, the construction company and putting forward a clear understanding that we must solve this matter soon,” he said.

“Unlike my detractors, I believe that I am very close with this. People will see it and they can judge for themselves. This is a development that has caused the Bahamas to be downgraded by Standard & Poor’s, but thankfully Moody’s has taken a ‘wait and see’ attitude.

“That is what’s in the balance here; not politics. Contractors are owed millions of dollars and I want them paid dollar for dollar. That’s what it is about; getting this going and being able to have a positive impact on the economy.”

Setting aside the politics, there are obvious economic and social imperatives to resolve the Baha Mar standstill as rapidly as possible, not least the low growth, high crime and unemployment environment that the Bahamas faces, and the scrutiny of international rating agencies over a potential further creditworthiness downgrade.

Baha Mar and 14 of its affiliated companies filed for Chapter 11 bankruptcy protection in a Delaware court on June 29 last year, blaming the resort’s contractor, China Construction America (CCA), for delays that caused it to miss previous opening deadlines.

However, the bankruptcy protection for Baha Mar’s Bahamian-based companies was later thrown out.

In reaction to the bankruptcy filing, the Government filed a winding-up petition against Baha Mar in the Supreme Court. The court later approved the appointment of the joint provisional liquidators, KRyS Global and UK-based Alix Partners.

In late October the Supreme Court authorised the termination of 2,026 employees at the stalled $3.5 billion development. The joint provisional liquidators said the lay-offs were due to the project’s financial insolvency.

Deloitte & Touche was subsequently appointed as the China Export-Import Bank’s receivers for the resort.