Buyers line up for Grand Lucayan

The Grand Lucayan resort.

As of Friday, September 28, 2018

By KHRISNA RUSSELL

Deputy Chief Reporter

krussell@tribunemedia.net

LUCAYAN Renewal Holdings Limited, the government’s special purpose vehicle given the task of finding a purchaser for the Grand Lucayan, has received “several” expressions of interest from prospective buyers.

Finance Minister K Peter Turnquest confirmed this, but would not reveal how many enquiries were received. Of those, he said there were “some” Bahamian groups wanting to purchase the Grand Bahama resort.

While government officials are not yet publicly revealing what the volume of responses to the EOIs could look like, The Tribune understands there may be as many as 12.

However, the process to choosing a reputable and capable buyer comes down to proper vetting, sources familiar with this kind of process said. The Tribune was told the government is keen on preventing this deal from mirroring that of the controversial Oban Energies oil refinery deal proposed for Grand Bahama.

The special purpose vehicle is planning to use several international due diligence mechanisms to ensure the prospective purchasers are not from the black market and are financially capable of running the hotel.

Last week, Prime Minister Dr Hubert Minnis told House members EOIs had already started to trickle in.

He made the disclosure as he revealed the government made the decision to step away from the Wynn Group’s proposal for the hotel because its CEO, Paul Wynn, wanted extraordinary concessions in a deal that would have cost the Minnis administration $159.65m.

Those concessions featured discounted electricity rates and permission to employ hundreds of foreign workers, including some without work permits, among other things, he told Parliament last week Thursday.

Dr Minnis noted the cost of this would have been “substantially” more than the $65m his administration will now pay to temporarily own the hotel. However, opposition parliamentarians noted in their speeches that the $65m far from captures all the costs associated with acquiring and operating the resort, with Exuma and Ragged Island MP Chester Cooper “conservatively” putting the overall cost at $100m.

Dr Minnis said Mr Wynn’s requests earlier this year made it clear the only option was for the government to purchase the resort in Grand Bahama.

He said of the Wynn Group’s requests: “I don’t want to say where I told them to go and how deep, but the government made it clear, Mr Speaker, that the requested concessions could not be agreed.”

In his speech, Dr Minnis said in July Mr Wynn asked to be given a 20 percent electricity discount rate, permission to employ 420 non-Bahamians for work on the project and an ability to have 15 percent pre-approval on non Bahamian employment without the need to apply for work permits.

He also explained Mr Wynn wanted to be exempt from paying any increase in taxes along with an annual marketing subsidy of $750,000, no casino taxes and a commitment from the government to either buying or building a new airport within two years.

Further, Dr Minnis said the government would have also had to agree to pay Mr Wynn for any losses he may have incurred with a guaranteed profit of seven percent.

The prime minister made these revelations in parliament among several others last week as the government by way of a resolution seeks to borrow $35m to complete the purchase of the resort.

Prior to the May 2017 general election, Dr Minnis said Mr Wynn, a Canadian developer, entered into a letter of intent with Hutchinson Whampoa – the Lucayan’s outgoing owners – with the intent to purchase the properties for more than the price the government will now pay.

At the time, Mr Wynn asked the government to pay them $2m 60 days after closing; $8m per year for the first three years for property subsidy; another annual subsidy of $7.2m for the following two years; and a $1.5m casino subsidy for five years.

Another $7m was also requested for three years for an airlift subsidy, along with an agreement for Most Favoured Nation status.

More like this story

TalRussell 6 years, 1 month ago

All I can say is imagine strain placed comrade members Imperial red shirts cabinet's attempt give their reckless decision purchase Lucayan Hotel a tidy-up - likes there really is lineup as many 12 potential money-rich powerhouse buyers is a knocking on Minnis and KP's doors - begging relieve them $134 million they've done taken out and committed PeoplesPublicPurse. to..... fuc#sake, sure hope one them is not -OBAN referred..... Apparently when you count red shirts dots - someone lineup Minnis and KP's door to be settlement compensated sometin likes Half a million dollars for alleged wrongful firing under former PLP regime... Yet we school children's Lunch Vendors, does remain unpaid.

BahamaPundit 6 years, 1 month ago

I highly doubtful there is a line of real purchasers for value. Probably a bunch of folks with $5 and $20 in their hand looking for a steal. The FNM has become the laughingstock of the Caribbean.

TheMadHatter 6 years, 1 month ago

"...to ensure the prospective purchasers are not from the black market and..."

...and hopefully to ensure the buyer has NO CONNECTION to communist China or any of their lackeys.

rawbahamian 6 years, 1 month ago

If the F.N.M. is the laughing stock of The Caribbean of which we are not a part of, then that simply means we stepped down from being the laughing stock of the entire world under the P.L.P.

John 6 years, 1 month ago

Maybe they should float an IPO. Then give every Bahamian a share. They will be the ones paying if the project fails anyway.

birdiestrachan 6 years, 1 month ago

Only a fool will believe anything those fellows have to say, All of the time this property was for sale there were no buyers. Suddenly out of the clear blue there are buyers lining up. Strangers to truth indeed.

bogart 6 years, 1 month ago

@John....floating an IPO....give every Bahamian a share...on this hotel....??......ACTUALLY ...that has already been done.....every Bahamian living....those just born....yet to be born....is a shareholder with the public money used to acquire the hotel....Now remains...to get return on investment....dividends...capital appreciation or profots from reselling.....and more importantly stability, jobs for GB...that be catalyst for more growth

Sign in to comment

OpenID

The Tribune