By NEIL HARTNELL
Tribune Business Editor
nhartnell@tribunemedia.net
Baha Mar has warned its laundry services provider is likely to be forced out of business if the resort developer is unable to quickly pay a $1 million debt, an event that would be “catastrophic” for its Melia Nassau Beach property.
Documents obtained by Tribune Business from the Delaware Bankruptcy Court reveal that Baha Mar is “projected to run out of cash” by this Friday, hence its desire for $30 million out of the $80 million financing facility being put together by its principals to be made available immediately.
Baha Mar’s Chapter 11 filings make it clear that, like it or not, the Government will effectively be forced to take sides in the dispute with its Chinese financing and construction partners because local approvals/permits are required for the Izmirlian-organised financing to be put into effect.
The documents reveal that Bahamas Investment Authority (BIA) and Central Bank of the Bahamas approvals are required for the $80 million debtor-in-possession financing facility to become reality.
These funds will enable Baha Mar to keep paying its bills for the next three weeks’, as it attempts to reorganise its affairs under protection from creditors while also attempting to resolve its differences with China Construction American and the China Export-Import Bank.
The $3.5 billion developer is asking the Delaware court to approve payments to its so-called ‘critical vendors’ to ensure its existing operations (the Melia) can remain in business. These payments will be capped at an aggregate $5 million.
Giving added urgency to its requests, Baha Mar warned that its laundry services supplier would be forced to close without permission for it to pay bills owing.
“Laundering linens is a key component of the debtors’ [Baha Mar] day-to-day operations at the Melia; the hotel must be able to provide clean linens for its customers’ use,” Baha Mar said.
It relied on a service provider that “built a special facility” to cater to its needs, and there was no other Bahamian company that could provide a comparable service.
“Upon information and belief, if this laundry provider is not paid its pre-petition amounts due and owing, it may be forced to cease business operations, which would be catastrophic to the ongoing operation of the Melia,” Baha Mar’s filings alleged.
It added that $1 million was owed to the laundry services supplier, who was not named in the filings.
When it came to food supplies, Baha Mar argued that the Melia’s six specialty restaurants needed to be fully stocked, otherwise guest “dissatisfaction will irreparably harm the Melia’s, and thus the project’s, marketability and value”.
And failing to provide employees with the customary one hot meal per day would “negatively impact staff morale”.
While Baha Mar did not name any of its primary food distributors, who are collectively owed $1.1 million, they are likely to include Bahamas Food Services, given its dominance in the hotel and restaurant supply chain.
“Given the limited number of significant food distributors in the Bahamas capable of supplying the large quantity of food required by the debtors’ day-to-day operations, the debtors do not believe that it is either practical or possible to engage the services of other food distributors,” Baha Mar alleged.
It also revealed that it owed $500,000 to its main drink distributors, and a similar sum to the fuel supplier for its generator.
With power outages a “common occurrence” in the Bahamas, Baha Mar warned that it would be “irreparably harmed” if it could not “maintain uninterrupted utility services” as a result of the sole fuel provider ceasing supply.
Baha Mar said $1 million was owed for goods and services supplied within 20 days prior to its Chapter 11 filing.
Comments
GrassRoot 8 years, 9 months ago
I think this article shows well, that the shit hit the fan for Bahamian vendors and service providers. They had to invest and ramp up their capacities to gain and retain Baha Mar as a client. And yet our Government and our Supreme leader are siding with the Chinese (of course the claim to play Switzerland - they have no oher options as they cant get of their asses, else we would see their pockets stuffed with money from China).
Well_mudda_take_sic 8 years, 9 months ago
This had better not be one laundry bill that Robin Hood Christie tries to put on the backs of the honest hardworking Bahamian taxpayers. Peter has nothing left to be robbed by Christie in order to gratuitously give to Paul. The sooner Christie wakes up to this reality, and dissolves parliament, the better. The Christie-led PLP government's failed social and economic policies have obviously not created the thousands of jobs that were promised in the last general election. That being the case, Robin Hood Christie is not somehow now justified in his glaring efforts to rob Peter in order to pay Paul. Christie was elected to create jobs and wealth, not re-distribute wealth to lazy non-productive stay-at-home individuals who, in the main, are unemployable because of the D- education his failed social and economic policies have left them with.
Reality_Check 8 years, 9 months ago
Christie, like Ingraham, will resort to buying votes any way he can at the expense of honest, hardworking Bahamian taxpayers. Like Ingraham, Christie has never known how to do anything else to keep himself in office. This explains why in every year in which we have had a general election, our national budget deficit balloons in amount after adjustment for the sale of any national assets, like the sale of our ownership control of BTC to Cable & Wireless. It's common knowledge that in recent years Christie has been selling our country to the Chinese in order to keep his political hide afloat. This has most dangerous implications for all Bahamians!
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