The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A Cabinet minister yesterday voiced optimism that "all of the ducks have been lined up" to finally complete the Grand Lucayan's long-awaited sale to the ITM/Royal Caribbean joint venture.

Dionisio D'Aguilar, minister of tourism and aviation, told the House of Assembly during the mid-year Budget debate that he believed talks between the Government and potential purchaser are "nearing the end of the journey" more than a year after the two sides held a lavish signing ceremony in Freeport to herald the deal.

Acknowledging that the Government's efforts to exit ownership of Freeport's 'flagship' resort property have "taken many twists and turns", and blaming the pandemic for scuppering an earlier closing, Mr D'Aguilar said commercial terms for the sale have now largely been agreed but did not disclose them.

He argued that COVID-19, which has devastated the cruise-dependent businesses of Royal Caribbean and ITM, had complicated closing the sale given the multi-billion dollar losses both purchasing parties have incurred.

And the deal was made "that much more complex" by ITM/Royal Caribbean's need to negotiate a separate agreement with Hutchison Whampoa, controlling 50 percent owner of Freeport Harbour Company, for the redevelopment of Freeport Harbour via the addition of two new cruise berths.

Suggesting that himself and Kwasi Thompson, minister of state for finance, "have spent countless hours trying to bring this project to a conclusion", Mr D'Aguilar said: "Back in March 2020, we had a deal. Signed and sealed.

"And then the pandemic struck, which significantly impacted the lead investors in that project, Royal Caribbean and the ITM Group. Both of those companies are significantly involved in the cruise business and, as we all know, they have been at a dead stop since March of last year."

Arguing that attempting to sell a hotel that was first impacted by Hurricane Matthew, then Hurricane Dorian "in the middle of a pandemic is to no easy task", the minister added: "While the journey has been long, and at times very painful, I think we are nearing the end of the journey.

"The terms have been essentially agreed and, having the sale of the hotel tied to Royal Caribbean and ITM first striking a deal with Hutchison Ports has made this transaction that much more complex. But I think all of the ducks have been lined up and we are nearing completion. I remain hopeful."

No estimated timeline was given for the Grand Lucayan sale's completion, and nor was any mention made of the report by the KPMG accounting firm that analysed whether the commercial terms were in the Bahamian people's interests and contained sufficient benefits for them.

Michael Scott QC, chairman of Lucayan Renewal Holdings, the Government-owned vehicle that owns the resort, previously told Tribune Business he personally views the sale to ITM Group/Royal Caribbean’s Holistica partnership as “a bad deal” that does not create sufficient immediate benefits for the Bahamian people after the terms were watered down due to COVID-19.

Suggesting that his views were shared by other Board members, Mr Scott said the Lucayan Renewal Holdings directors were now looking at “other viable options” for the resort's future in case the ITM Group/Royal Caribbean deal fails to materialise.

In the meantime, Lucayan Renewal Holdings and the Government are moving to re-open the resort on March 25. Tribune Business understands that Mr Scott and the Board are presently focused on operational matters, and have effectively been shut out of the ITM/Royal Caribbean negotiations. They have not even been presented with a copy of the KPMG report.

Mr D'Aguilar, meanwhile, responding to Opposition taunts that the Grand Lucaya has consumed some $150m in taxpayer monies since the Government acquired it in September 2018, retorted that the Minnis administration acquired the property to prevent a repeat of the derelict property that is now the Royal Oasis.

"They wanted it to sit and, I guess, go the way of that other hotel which sits abandoned and an eyesore in the downtown Freeport area," he added. "But we said 'no way'. No matter the cost - and it has been costly - we were going to do what we could to save that hotel. And that is exactly what we intend to do. We owe that to the people of Grand Bahama."