By NEIL HARTNELL
Tribune Business Editor
The principal behind a proposed $6.3 billion development for east Grand Bahama yesterday shrugged off “pot shots” over whether he has the necessary financing, telling Tribune Business the funds are “sitting” in a Hong Kong bank.
Lawrence McDonough, head of Kylin International, said he was unmoved by the constant speculation that he and his partners lack the necessary financing to get the proposed Blackwood Pointe ‘mega development’ off the ground.
He told this newspaper that whether the project proceeded was now “in the Government’s ball court”, having submitted all the documents requested by the Christie administration in the last round of negotiations.
Pledging that he was “not going anywhere”, following previous suggestions Kylin was switching its attention to potential projects in Turks & Caicos and Antigua, Mr McDonough lauded Blackwood Pointe as “the right project” for both Grand Bahama and the Bahamas as a whole.
He added: “I think we’re in pretty good shape.”
Scepticism over whether Mr McDonough and Kylin have the necessary financing to pull off a project of such magnitude - it features 3,000 new hotel rooms spread between five-six properties, a cruise port, marina, residential housing, casino, light industrial and manufacturing hub, new power plant, and new airport and avionics capabilities, not to mention huge infrastructure investment in ‘virgin’ territory - has been rife for some time, and heads the list of government concerns.
Kylin has been exploring Grand Bahama as the site for a multi-billion dollar, resort-based investment project for several years, having had a presence on the island since before the 2012 general election.
It initially focused on a site in the Port area for a project said to be valued at around $1 billion, before setting their sights on a development six times’ larger in the island’s eastern end.
Tribune Business sources at the time again confirmed that the Grand Bahama Port Authority and Hutchison Whampoa were sceptical that Kylin would be able to obtain the necessary financing, raising immediate questions over whether it could raise funding for a much larger project.
Responding directly to such concerns, Mr McDonough told Tribune Business: “People are going to take pot shots at you. People said there’s no money. I don’t care.
“There’s different ways we’re going to be looking at this. I will be talking to the Prime Minister in the next week or two about how we’re going to fund this.”
Then, he revealed: “The funding is sitting with HSBC Hong Kong. We have put aside $6.3 billion financing for this thing.”
Indicating that the funding may not be HSBC”s, but merely placed with its Hong Kong-based institutions, Mr McDonough added: “Ever since the first meeting [with the Government], the financing has been in place.
“We’ve never faltered with financing. We’re down to confirming with the bank where the money is. The due diligence has already been completed on the banking side through CPAs (Certified Public Accountants) in the Bahamas, lawyers in China, banking institutions in Hong Kong. A lot of people have been involved in the financing.”
Mr McDonough explained that with Blackwood Pointe set to be built-out over a four to four-and-half year period, Kylin would draw down the financing in stages as it entered different phases of the construction project.
Explaining that these phases would roll into each other, and be going on simultaneously, Mr McDonough added: “I would be a fool to borrow $6.3 billion from day one because the interest would kill me.”
He told Tribune Business that the decision now largely rested with the Christie administration on whether to approve the Kylin project, having submitted all the documentation requested.
“We have given the Government the paperwork from the last round, and I’m kind of just waiting for a response to our proposal,” Mr McDonough told Tribune Business. “There’s a couple of things both sides have to do.
“I would say that during the last month, month-and-a-half, the stuff came together, and we feel what we presented to the Bahamas Investment Authority and the Task Force was positive.”
Mr McDonough acknowledged that both the Kylin side and the Government had their respective concerns, adding: “Everyone has been checking twice, and measuring once.”
“The Government has never, ever said they’re not interested in what we have proposed or any of the components,” he told Tribune Business. “Everyone has done their due diligence, and are doing everything required. I feel very comfortable.
“It’s in the Government’s ball court. I was just with some of our partners from China. They have seen all of the documents, and I am going to be delivering the originals.”
Mr McDonough added: “I’m just waiting for the approval. I’ve never been denied. I’m waiting for the Government to tell us where they want to go next. I’m not going anywhere. I’ve been in the Bahamas for a long time, and I feel this is the right project for Grand Bahama and the Commonwealth as a whole.
“We think our business model, our business plan is very good, and the Prime Minister and the Bahamas Investment Authority and Sir Baltron Bethel have backed this thing, and given us support. They haven’t denied us anything. They see the bigger picture, and the bigger picture is very large.”