The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Grand Lucayan's new chairman yesterday blasted Hutchison Whampoa's "lack of co-operation" for threatening to delay the creation and release of a full sales prospectus for the resort.

Michael Scott, who heads the Government-owned special purpose vehicle (SPV) acquiring Freeport's anchor resort property, told Tribune Business that it was proving "very difficult" to assemble the necessary information all serious buyers will require because the current owner was not being helpful.

Lucayan Renewal Holdings, the SPV, is scheduled to close the $65m purchase on September 11, but Mr Scott said the Government's desire to effect a rapid sale to the right buyer could be endangered if the sales prospectus was not released on time.

Speaking after Lucayan Renewal Holdings' first four-hour board meeting yesterday, Mr Scott said the newly-appointed directors were "spear fishing into the accounts" and "drilling down" into the Grand Lucayan's financial and operational condition in a bid to stabilise the resort and prepare it for sale.

Describing completion of the sales prospectus as a "very, very high" priority for the board, he added: "What we've got so far is not useful. We have a draft from a consultant of the Government that is not useful.

"We're drilling down and trying to get copies of previous documentation, which is very difficult because Hutchison is not very co-operative. That [the sales prospectus] encompasses the state of the resort, so that encompasses detailed information on repairs and looking at estimates and things like that.

"You can't do your due diligence and show the property properly to informed buyers until we have that, and we're not getting the necessary co-operation from Hutchison. The information made available to me is of marginal utility."

Sales prospectuses for assets such as the Grand Lucayan typically contain a detailed history of the resort's financial performance; reports on its physical structure; staffing and union contracts; and liens or charges over its real estate; operational details on indicators such as occupancies, room rates and airlift; and the state of the wider tourism market.

Among the critical documents that the Lucayan Renewal Holdings Board will want to access is the post-Hurricane Matthew damages and repairs assessment, especially the one relating to the former Memories property, as the Government may have to renovate and re-open this if a qualified buyer does not emerge quickly.

Mr Scott said Board directors were still largely in the research and information-gathering stage, with several assigned to undertake specific tasks and inquiries at yesterday's meeting.

"We had a very productive meeting, but there's not a lot I can say because we're waiting for reports we've not got," he told Tribune Business. "We're making some inquiries and deciding how we want to proceed.

"I'm waiting for reports to come back from individual Board members. I've assigned them certain things. We're making some inquiries and I don't want to prejudice them.... We've got our forensic accountant [Ed Rahming] on it, and he's drilling down into the accounts. Nothing is for certain, but we're working very hard, very hard."

Tribune Business sources, speaking on condition of anonymity, said the Board made no decision to appoint a brand operator or management company for the Grand Lucayan, describing this as a "Plan B" option.

They explained that hiring an operator now made little sense, and would add to the Government's and taxpayer's costs, if a buyer could be found and sealed within the three-six month timeframe targeted by Mr Scott.

"The core function is to sell," one source said. "If they don't sell within three to six months, I think then you arrange that. They may hire just an executive manager; someone reporting to the Board."

Describing the Lucayan Renewal Holdings Board as being in "fact finding" mode, they agreed: "The main thing now is to get a proper prospectus done so they can go out to the market and see what comes.

"They're probably going to get loads of bottom feeders initially, and will have to go through them. This property is in a zero tourist market and is a very hard sell. Getting the Bahamian people to think all these properties, all of a sudden, have value is a mistake. They only have potential value."

"The main thing now is to get a proper prospectus done so that