As Deadline Looms, Baha Mar Agreement 'Not So Close' Says Izmirlian
PHOTO: Sarkis Izmirlian. (Photo by Brian Major)
With one day left before his company stands to be eliminated from the project, Sarkis Izmirlian, chief executive of Baha Mar Ltd. and developer of the stalled $3.55 billion mega-resort said the parties in the dispute are “not so close” to an agreement.
Yet in a Bahamas radio interview Wednesday, Izmirlian also added, “We’re hoping that both China State Construction and the EXIM Bank can come to the table and negotiate with us.”
In his first public comments following the launch of talks in Beijing among the developer, China State Construction Engineering Corp. (CSCEC) and China Export Import Bank (EXIM), Izmirlian confirmed that the parties are still meeting in Beijing. “They had made progress but there is no deal yet,” he said. “We are committed to continuing as long as other parties are willing to stay at the table and find a solution.”
Under the terms of the winding-up petition approved by the Bahamas Supreme Court, the Bahamas government would remove Izmirlian and Baha Mar Ltd. from the project should Baha Mar officials and their Chinese partners fail to reach a negotiated settlement before the end of Thursday. The court would then appoint a provisional liquidator to direct the mega-resort’s completion.
Nevertheless the sides are “not so close,” admitted Izmirlian. “But we’re making progress – which is a lot more that can be said last week. Last week we were not so close and we were making no progress.”
In the interview, Izmirlian discussed why he felt the project went off the rails, described his unsuccessful efforts to broker a deal as the March 27 deadline approached and explained why he’s proposed Bahamian contractors complete the resort in place of CSCEC.
“We need to complete Baha Mar, it’s plain and simple,” he said. “And I need people I can rely on, who can do quality work and the Bahamian contractors have been our most reliable since Baha Mar started.”
Asked if he’s feeling pressure to reach an agreement by the end of Thursday, Izmirlian said, “I‘ve been trying to make a deal for four months now. There was an urgency to make a deal on March 27 when we missed our opening. Every day that goes by I’ve got thousands of Bahamians that are not able to start their careers.
“I know that the economy of the Bahamas needs it. So yes, there is a great urgency to make a deal and unfortunately the other parties have not felt that sense of urgency,” he said. Construction delays had driven the cost of completing the resort “from $300 million to now $400 million,” he said. “And it will keep on going up if we don’t find a solution.”
An agreement in the near future would make it possible for the mega-resort to open this winter, Izmirlian said. “There is absolutely a possibility for Baha Mar to open in time for the Christmas season. But that window is closing very rapidly and legal maneuvers that the government [has] undertaken can only delay that.”
While Izmirlian and CSEC officials began trading accusations almost as soon as the delays first mounted, the developer’s decision to file for Chapter 11 bankruptcy in a U.S. court seemed to particularly anger Bahamas government officials. Bahamas Prime Minister Perry Christie characterized the move as an affront to the country’s sovereignty.
Izmirlian defended the strategy Wednesday, saying “Chapter 11 is a well-trodden path that has been used by countless international companies that have a connection to the United States to reorganize financial affairs.”
He continued, “It is a process that allows you to pause, look at all your creditors and say ‘let’s look at a way that we can pay all of you back.’ Unfortunately the Bahamas doesn’t have a Chapter 11 process. If they did, we would have filed in the Bahamas.”
Izmirlian said under the Bahamas’ “liquidation” process “you cannot do the things you can do under Chapter 11. The fastest way to open Baha Mar is and was Chapter 11.”
The Baha Mar chief said he did not intend to “blindside” the Bahamas government by filing Chapter 11 in the U.S.
“The government of the Bahamas was fully aware of our difficulties with the bank [and] fully aware of our difficulties dealing with the general contractor,” he said. “But Chapter 11 is nothing you go and advertise to the world. If the news of Chapter 11 had gotten out, who knows what might have happened? So it wasn’t to blindside the prime minister of the Bahamas. It was to allow us to do the things that will open Baha Mar.”
The Baha Mar chief acknowledged the impasse may affect his relationship with Christie and the Bahamas government. In the interview he repeatedly professed his “love” for the Bahamas, describing himself as a 15-year resident whose family has visited the destination for 40 years.
“From my point of view I have the utmost respect for Prime Minister Christie. He is the one who believed in Baha Mar in the first place,” Izmirlian said. “I believe the prime minister is getting bad advice. I think he believes he is doing the best thing for the Bahamian people. I don’t think he is, but I think he believes it.
“I will work with him and do everything within my power to make sure that our relationship with the government of the Bahamas is a good one,” he said, “and that it allows us to open Baha Mar as soon as possible.”
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