Despite Bank Statement, Baha Mar Resolution Appears Far Off
Photo courtesy of Baha Mar
The Export-Import Bank of China (CEXIM)’s recent announcement of a preliminary plan for the “future arrangements” for the forlorn $3.5 billion Baha Mar mega-resort has done little to alleviate fears the development is nearing unwanted “white dinosaur” status, in the words of one former Baha Mar development company official.
CEXIM’s December 17 statement says the Baha Mar financier “has been actively working with relevant stakeholders to seek proper resolution of the issues that the project is facing, and has been maintaining close communication and contact with the Government of the Bahamas.
“Currently, there is a preliminary plan concerning the future arrangements and this will be launched as soon as practicable,” the statement continues. “In addition, our bank has been in contact with a number of potential investors and they have expressed initial interest in the project.” In the statement CEXIM, the project’s primary financer via its $2.45 billion loan, vows to “formulate a comprehensive solution as soon as possible.”
With the stalled mega-resort now one year beyond its original opening date, the Bahamas Supreme Court this month postponed a potential liquidation hearing to February, ensuring the massive property will remain unopened through at least the spring of 2016.
Bahamas media reports indicate interest in Baha Mar from a group led by Bahamian hospitality executive Sol Kerzner has failed to materialize. Pending imminent developments from CEXIM’s discussions with potential investors, observers fear a resolution to the impasse will not come quickly.
In a Bahamas Tribune article Dionisio D’Aguilar , a former Baha Mar director, said CEXIM’s receivership did not result in Baha Mar’s “swift completion and opening” and had in fact backfired.
Sarkis Izmilian, Baha Mar’s original developer, had sought to place the bankrupt resort into Chapter 11 prior to CEXIM’s opting for receivership. Izmirlian has since said CEXIM and Bahamas government pursued the wrong strategy and last week D’Aguilar agreed, saying the stalled Cable Beach project is “turning into an enormous disaster” in which the government is “left with this huge white dinosaur on their hands.”
Nevertheless, Izmirlian’s BMD Holdings seems to be open to look for a way to resume its development of the mega-resort. “The developer has made proposals to China EXIM Bank and the other parties, which would enable Baha Mar to be completed properly and opened successfully,” said BMD officials in statement that followed the CEXIM comments. “We continue to be willing to work with all parties to achieve these goals as expeditiously as possible and look forward to hearing back from the bank.”
Meanwhile, a Bahamas Tribune report outlined several concerns among observers as the mega-resort remains vacant, including an upcoming Inter-American Development Bank (IDB) meeting scheduled for Baha Mar’s completed conference center in April 2016.
The sources report issues ranging from departures among the remaining Baha Mar staff to physical deterioration of resort infrastructure as facilities remains closed.
Bahamas legislator KP Turnquest said recently a $600 million investment would be required to complete Baha Mar’s construction and open the resort based on statements from Perry Christie, the Bahamas prime minister. That amount is up from $300 million at Baha Mar’s September Chapter 11 filing.
With marketing, staff re-hiring and training and other pre-opening costs, Turnquest said the price tag to launch the property could total “close to $1 billion.”
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