Bahamas Electricity Corporation (BEC) Chairman Leslie Miller yesterday stated that top government officials should immediately leave for Beijing and should not return “until they have a deal sealed” in the wake of Baha Mar Ltd.’s decision to file for chapter 11 bankruptcy.
Speaking with Guardian Business in the aftermath of the breaking of the news last night, Miller said that the clock is ticking on the $3.5 billion resort, stating that the building could be ruined within a six-month window of inactivity, necessitating costly renovations if negotiations between developer Baha Mar Ltd. and general contractor China Construction America continue to falter.
“I think that the government can now appreciate the urgency in going to Beijing, sitting with all the players, and getting it done… Whatever it takes, don’t come back to this country until you have a deal sealed.
“A building is a living entity and if you leave it there it will die. Death comes to a building very quickly once it’s sitting there morbid. So it’s imperative that everyone steps to the plate and do what needs to be done,” said Miller.
Files submitted to the U.S. Bankruptcy Court for the District of Delaware reveal that Baha Mar Ltd. owes its top 20 creditors roughly $120 million. Of that sum, BEC is owed $19.5 million. However, Miller said yesterday that the actual debt totaled $24 million largely comprised of the former Crystal Palace’s legacy debt to the utility.
“The bill for BEC is really a bill that came over when it was the Crystal Palace, so when they changed hands, that bill was there, but it is their bill. I think it’s $24 million now,” Miller said, adding that the long long-outstanding debt did not present an immediate concern for BEC.
When asked whether he thought BEC would suffer as one of the top creditors, Miller said that any impact would be minimal, given the debt’s age. Instead, Miller stressed the need for Baha Mar to succeed above all else, stating that it was frankly “too big to fail” and was already hemorrhaging money.
“It is too big to fail. That’s how I see Baha Mar. It’s such a vital cog in our economy we cannot let it fail… I don’t care how much money is lost, it still has to be done, and right now they’re losing about a half a million [dollars] a day,” Miller said.
Baha Mar CEO and Chairman Sarkis Izmirlian announced yesterday that the company and its associated entities were voluntarily filing for Chapter 11 bankruptcy. The news came just over a week after Prime Minister Perry Christie stated that he had received “encouraging” news regarding the long-standing impasse between general constructor CCA and Baha Mar Ltd.
Minister of Tourism Obie Wilchcombe and Minister of Immigration and Foreign Affairs Fred Mitchell both expressed surprise when informed of the move after both had separately voiced optimism regarding the mega resort’s opening.
“I don’t know if the right hand knew what the left hand was thinking, but I know one thing, as I indicated from the beginning, persons from here should’ve gone to Beijing,” said Miller.
Ultimately, though, Miller believed that the resort would emerge “a little stronger and hopefully healthier financially” from the experience as it seeks an opening date.
Government intervention
Miller stated that the Bahamian government needs to play a “pivotal role” in ensuring that the resort is completed and opened in short order. Miller added that he thinks an agreement could be made with either Christie or Deputy Prime Minister Philip Davis at the helm of negotiations if they leave for China immediately.
Despite the troubles facing the project, Miller said that future negotiations present a “grand opportunity” for top PLP officials to bring hope to the Bahamian people and end the deadlock crippling Baha Mar’s development.
“Now more than ever a team needs to leave this country almost immediately, go to China, sit down and work this situation out on behalf of the Bahamian people… This can only be done now from a government-to-government level,” he said.
As part of the Chapter 11 filing, Izmirlian agreed to arrange the funding for the debtor-in-possession (DIP) financing facility, which will enable Baha Mar to “operate and meet its financial obligations in the interim during the Chapter 11 process”, according to a Baha Mar press statement. The total DIP facility is up to $80 million, of which up to $30 million will be utilized by Baha Mar over the next 30 days.
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