The receiver-manager appointed by the Export-Import Bank of China (CEXIM) for the stalled $3.5 billion Baha Mar megaresort yesterday refused to answer questions about the closed bidding process for the property, and about whether a potential bid by China Construction America (CCA) Ltd. was among the rumored dozen-plus bids.
Now that the bidding has closed for the bankrupt project, many are anxious to know whether CCA did indeed put in a bid. But, reached for comment yesterday, receiver-manager Raymond Winder, managing partner of Deloitte and Touche (Bahamas) Ltd., refused to say who may have bid or even how many bidders there may have been.
Last week, though, Winder talked with Guardian Business about the advantage any bidder would have using CCA as the contractor, given the contractor's familiarity with the project.
He said, "CCA has expressed a willingness in negotiating with the bank as the potential contractor."
Winder also said CCA would not be barred from bidding.
"CCA also has expressed interest in actually looking at status, and so they are not precluded from making a bid. So we don't know who ultimately will be making a bid... but I will say that CCA, because they are the contractor, has a better handle on what is needed to complete the project. One should also note that CCA has the capacity - if they decided to make a bid - to complete it," Winder said.
Yesterday, Guardian Business reached out to Sean Moree, CCA Bahamas' lawyer, to enquire as to whether CCA did indeed make a bid. Moree declined to comment.
Sorting out the results of the bidding process will weigh heavily on the path forward for the resort: As noted in letters from BMD Holdings Ltd., Granite Ventures Ltd. and Baha Mar developer Sarkis Izmirlian himself to the receivers, it is not clear that the receivers are bound to accept any of the bids in any event, or if they are free to simply start the search again if they are unsatisfied.
The offer
At the same time, questions are being asked about the offer Izmirlian has made to the bank, and his repeated assertions that he would "make the investors whole". Consider the terms: In various communications, Izmirlian or his representatives say his offer -- made in January 2016 -- would enable Baha Mar to be opened as soon as possible, that payment would to be made to unsecured creditors, and that CEXIM Bank would not have to incur a discount.
Taken as individual steps, the cost to open Baha Mar has been estimated most recently by Prime Minister Perry Christie as $600 million and rising. Christie gave the figure in October 2015, after the provisional liquidators of the bankrupt development fired more than 2,000 people.
In addition, the unsecured creditors -- which include CCA Bahamas ($72 million plus), Bahamas Electricity Corporation ($19.5 million) and Yates-Osprey ($5.3 million) -- are owed more than $120 million, all told.
And the bank itself as the main financier is owed $2.45 billion.
Izmirlian, therefore, is saying that his offer is able to satisfy all these needs, which taken together exceed $3.1 billion. That is, if Izmirlian plans to pay all the unsecured creditors dollar for dollar what they are owed. It is worth noting that it is Prime Minister Perry Christie who has continually promised that the unsecured creditors would be "made whole".
Izmirlian's offer has repeatedly stated "payment would be made to unsecured creditors". And the reams of paper generated in the Delaware bankruptcy proceedings detail just how critical language is in this affair.
Some question how the developer that filed bankruptcy in June 2015 could put together an offer like that. And some are commenting on the fact that Izmirlian declined to enter a bid in the process. The developer gave his reasons: He felt the process was opaque and was unwilling to sign a non-disclosure agreement (NDA) for fear it might limit his rights in the future, among other things.
Politics
Meanwhile, Free National Movement Chairman Sidney Collie pointed out in a statement issued yesterday that almost a month has passed since Prime Minister Perry Christie stated publicly that after meeting with developer Sarkis Izmirlian he was encouraged about Baha Mar's future. Pointing to Izmirlian's choice not to bid, Collie accused the government of more "empty rhetoric and broken promises - but little to no progress on getting the country turned around".
"Not too long ago they were promising to get Baha Mar open and 5,000 good paying jobs would come with it. Yet Baha Mar still stands vacant and abandoned - a hulking testament to the continuing failures of this government.
"The prime minister never shies away from a press opportunity to paint his rosy picture and provide false hope. Countless Bahamians are out of work, looking for the jobs that were promised to them. Countless tourists are disenfranchised, their vacation plans pulled from under their feet, looking elsewhere to spend their vacation dollars. All this as our taxpayers are still on the hook for the annual utility costs of the vacant Baha Mar that runs in the tens of millions a year," Collie said.
K. Quincy Parker, Guardian Business Editor
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