Tonight, Prime Minister Perry Christie addressed the nation on the state of Baha Mar negotiations and proceedings. The full text of his speech is as follows.
My Fellow Bahamians,
It is appropriate for me to address the nation this evening to provide an update on the state of affairs surrounding the delayed completion and opening of the $3.5bn mega Baha Mar resort project in Cable Beach. This project, the largest of its kind ever to be built in a single phase in the Caribbean Region, has enormous economic and employment implications for The Bahamas, and my Government has been working diligently with the relevant parties with a view to ensuring the completion of the project as soon as possible.
The project, by most informed estimates, is 97% completed but has missed two opening dates. Construction work has stopped and the general contractor and other contractors and sub-contractors are owed substantial sums of money. A dispute has also arisen between the developer and the general contractor. The balance of the existing loan from China Eximbank is insufficient to settle the amounts owed to contractors and sub-contractors and to complete the project. The Developer has sought to obtain additional construction funding from China Eximbank and the release of the balance remaining under the original loan. In this regard, the Developer solicited my intervention with Eximbank. Over the past several months, I have held a series of meetings and exchanged correspondence with the principals of Eximbank, China Construction and Baha Mar in order to seek a resolution of the various funding and construction issues, all with a view to completion of the project within the shortest possible time frame.
Following direct discussions with the parties, my understanding at the end of June was that the only major outstanding financing issue was that Mr. Izmirlian would be required to provide a guarantee in respect to certain additional funding that Eximbank was willing in principle to advance. Under the terms of the additional loan the bank would contribute 50%, with the remaining 50% being divided equally between the Construction Company and the Developer, with each providing guarantees.
On the afternoon of June 29th, 2015, the Developer, in the person of Mr. Izmirlian, requested a meeting with me. It was during this meeting that he, without prior notice to the Government, the Eximbank and China Construction, informed me that Baha Mar had filed a Petition for Chapter 11 bankruptcy in the United States.
Soon thereafter the Developer proceeded to seek recognition of the U.S. Chapter 11 Bankruptcy protection by application to the Bahamas Supreme Court. This was objected to by the Bahamas Government, China Eximbank and China State Construction. The proceedings were adjourned at the request of Baha Mar for a hearing on Monday July 20th, 2015. The Supreme Court nonetheless directed that the parties should continue, in good faith, negotiations aimed at ensuring mutually acceptable arrangements for the completion and opening of the Baha Mar project.
For completeness, it should also be noted that Baha Mar initiated legal proceedings in the United Kingdom against China Construction and locked the Construction Company out of their Cable Beach premises.
Negotiations between the parties were convened in Beijing China from July 13th to July 15th. The Government delegation was led by the Attorney General and Minister of Legal Affairs, the Honourable Allyson Gibson QC, who, on my behalf, chaired the sessions as well.
After working diligently around the clock to arrive at a solution acceptable to all parties, and having made considerable progress, the talks nonetheless ended without agreement whereupon the delegation returned to Nassau this morning and promptly reported to Cabinet along with its legal advisors.
It transpired at the Beijing negotiations that Baha Mar’s additional funding requirements had increased considerably, and now included not only funding for completion of construction, but funding to meet start up and operating expenses; funding to cover other liabilities and deferral of principal and the initial balloon payments under the loan facility with Eximbank.
I am advised that both Eximbank and China Construction Company demonstrated flexibility in meeting Baha Mar’s expanded funding requirements, and project completion date. This notwithstanding, Baha Mar still wanted an extended period for further negotiations which, however, was not acceptable. Baha Mar was also not prepared to agree to terms which would have included the immediate discontinuance of their Chapter 11 Bankruptcy proceedings in the United States and their legal action against China Construction in the United Kingdom. These terms were demanded by Eximbank and China Construction, and supported by the Government, as conditions to any agreement for additional funding, resumption of construction and project completion date.
Meanwhile, the Government has arranged for a second payment of salaries of Baha Mar’s Bahamian employees, with a view to such payments being recovered in due course so as not to place any additional strain on the Bahamian taxpayer.
Eximbank and China Construction have pledged their willingness to work with The Bahamas Government in their common objective for the completion and opening of the project in the shortest possible time.
In this regard it goes without saying that the completion of the Baha Mar resort is a matter of the utmost national importance. Baha Mar must open! Whilst we certainly remain open to further discussions, my Government has taken the decision to seek to bring the Baha Mar development project under the control and supervision of the Bahamian Supreme Court, right here in The Bahamas. Consequently, on the advice of our Bahamian, U.K, and U.S. lawyers, The Attorney General has today filed a winding up petition in the Bahamas Supreme Court against the 14 Bahamian entities that filed for Chapter 11 protection in the United States at the end of June. These compulsory or involuntary winding-up proceedings are designed to work in very similar terms as a chapter 11 but with the stark difference that they will be controlled by provisional liquidators under the supervision of the Bahamian Courts rather than being controlled by Mr. Izmirlian. These liquidators, if appointed by the court, will be neutral and impartial professionals of the highest quality and of impeccable credentials.
Importantly, the role of the liquidators will be to expedite the resolution of the matter and to prepare a plan for the restructuring of Baha Mar, that will result in the earliest possible completion and opening of the project. The Bahamian court is familiar with using the provisional liquidation procedure as an effective tool to reorganise a company’s affairs. Indeed the well-known case of Charter Oil is an instructive example of how a major company in The Bahamas was placed in compulsory liquidation by its creditors, was successfully re-structured in the course of the liquidation, and then, by order Of Justice Harvey DaCosta, was able to come out of liquidation. At that point the liquidators dropped out and executive authority was restored to a new, reconstituted board of directors. Moreover, such a path is specifically provided for under the Companies (Winding-Up) (Amendment) Act 2011.
Baha Mar took the decision to file for bankruptcy protection in the US. Papers filed in the US suggest that if Baha Mar’s strategy in the US was allowed to continue, there would not only be a substantial delay in the completion of the project but there would also be great uncertainty as to whether the developer would ever be in a position to complete the project at all.
Further, were the processes to continue in the US, the fate of this Bahamian project, its Bahamian employees and the international reputation of the sovereign nation of The Bahamas would be in jeopardy. Consequently, and in addition, the Attorney General is challenging Baha Mar’s application to the Supreme Court of The Bahamas to recognise and accept the jurisdiction of the Delaware Court in The Bahamas. This is not just a matter of national sovereignty. There should be a Bahamian solution to this Bahamian issue and the majority of the key parties in this matter recognise and support that position.
The actions taken by the Attorney General are not designed to punish Baha Mar, much less is it the intention to destroy Baha Mar. On the contrary, the purpose of the provisional liquidation is to enable the appointment of a neutral party to take control of the process and to work with the key stakeholders under the supervision of the Bahamian Court to prepare a strategic and workable roadmap for the completion and opening of the resort. Such a solution will recognise and respect the rights and legitimate interests of the key parties, including Baha Mar and the Bahamian people.
My fellow Bahamians:
I am absolutely convinced that we are on the right path, one that will lead to the completion and opening of Baha Mar in the near future. While it is true that there are still major obstacles to be overcome, I remain extremely optimistic about the end-result, one that will not only ensure the employment of thousands of Bahamians but the emergence as well of a resort destined for great success in the tourism industry of The Bahamas and of the region.
As we have done throughout we, as your government, will continue to be guided by what we honestly and truly believe to be in the best interests of the Bahamian people.
In closing I need therefore only repeat that we are on the right path and that we can all look forward to the completion and opening of the Baha Mar resort in the near future.
Thank you and good night.
Comments
ThisIsOurs 8 years, 9 months ago
It's scary that probably 50% of cabinet probably had no idea what chapter 11 was before this Bahamar episode. I mean look at Alfred gray who didn't know it was illegal to call up a judge and ask him to reverse the decision on a closed court case.
These men are in charge of passing laws that affect all of our futures and they're as dumb and dim as door nails.
ThisIsOurs 8 years, 9 months ago
Hmmm..is this release appropriate? Justice Winder indicated he was awaiting the outcome of the deliberations to make his decision. Has the PM (with this statement) told the judge what HE wants to see happen? No Alfred Gray phone call needed?
"I am advised that both Eximbank and China Construction Company demonstrated flexibility in meeting Baha Mar’s expanded funding requirements, and project completion date. This notwithstanding, Baha Mar still wanted an extended period for further negotiations which, however, was not acceptable."
The devil promised Jesus the world if he would ONLY bow down to him. Antonio grants Shylock a pound of flesh for an unpaid loan, but (Shylock finds out later) he cannot take one drop of blood in the process. The most generous offer saddled with onerous conditions means nothing. This is the SCARIEST I have ever seen the government act. Everything is too pat. I'm convinced this path was set out before Izmiralian filed anything, in fact I'm almost certain it's the reason Izmirilian filed, fouling their plans.
GrassRoot 8 years, 9 months ago
yes, this is Alfred Gray all over again. of course.
ThisIsOurs 8 years, 9 months ago
He evens cites case law..can you imagine? Alfred Gray and PAC, only this time it's an unsolicited but signed opinion.
SP 8 years, 9 months ago
................................. Always Remember The Lyford Cay Mantra ................................
"Pirates are just misunderstood entrepreneurs"....... Michael Dingman
SP 8 years, 9 months ago
.... Strong Dose Of Medicine To Cure Christies Xenophobia Against Bahamians .....
Mumbo Jumbo Christie stupidly declined more than ample opportunities with numerous Bahamian entrepreneurs FDI partnerships bringing $BILLIONS to the table that would have easily leveraged the countries anemic growth with or without Baha Mar.
Instead he choose to maintain the entrenched "Bahamians need not apply" xenophobic posture that has stifled growth in our country for 42 years leading us to near failed state status.
For the sake of the country, we all wish Baha Mar is fast tracked to operational status.
No sympathy for PM Christie.
Jackass Reaps As Jackass Sows.
Sickened 8 years, 9 months ago
A jackass is a truly ignorant beast. However, Christie acts with purpose.
sheeprunner12 8 years, 9 months ago
The Bahamas Government did not have too many options here ......... we have FIVE hotels at different stages of completion to get opened and making money for the investors and the country .......... that is (as correctly stated by the PM) the major objective here .......... Good bye Mr. Izmirlian ........... time to move on for the four parties involved (Izmirlian, Government, Exim Bank & CCA)
GrassRoot 8 years, 9 months ago
All I can say sheeprunner12 "Good Bye FDI". This is worse than Nicaragua. Helping the thieves (number boys), stealing from the others, and kicking the Constitution with his feet. He really tries to outdo our founding father.
GrassRoot 8 years, 9 months ago
If the PM really intents as quoted by Reuters to take control of Baha Mar, this would be the end of FDI in the Bahamas. If he can take Baha Mar, he can take any smaller asset away from a foreign owner. Bahamas is not better than Argentina, Nicaragua, Venezuela, Ecuador, not better and former Soviet territories such as Usbekistan or Azerbeidjan, where the government can walk into your house or shop and take it.
It also shows the blatant disregard for the separation of powers. Our PM has a view of democracy that is right there where Zimbabwe's Mugabe or Nicaragua's Sandinistas have theirs.
Last but not least, he considers to side with the Chinese is the smart thing. That's a decision he is free to make. Whether this is in the interest of the Bahamas, history will tell us. He may get a bronze statue somewhere in a god forsaken corner of Bejing, but certainly not in the Bahamas ever.
Good luck and good night.
MonkeeDoo 8 years, 9 months ago
No doubt we will see certain members of the party faithful appointed to be provisional liquidators. !!!! Keeping it ALL in the family !.
jus2cents 8 years, 9 months ago
Hello FNM? anybody......... Silence ...........crickets ..........
HarryWyckoff 8 years, 9 months ago
There's nothing for the FNM to say. The Bahamas is now officially a corrupt dictatorship on the brink of financial disaster.
As with all dictatorships, democracy is redundant, so the FNM is redundant. Dictators don't allow opposers any say.
jus2cents 8 years, 9 months ago
Yes, and the silence confirms you are right.
Millennial242 8 years, 9 months ago
So our country should allow bad corporate business decisions to run rampant for the sake of continuing FDI?
While I did not vote for the PLP, as an educated young Bahamian (yes I know the difference between Chapter 11 Bankruptcy and Chapter 7 in the US), I agree with this approach the government is now forced to take.
I strongly believe that we need to look at this without the politics and petty "naming & shaming" (even though it is there). As a Bahamian (not as a PLP or an FNM), I was offended to learn that a company so heavily involved with the Bahamas thought it was the "right thing to do" by seeking protection from the US Justice System. Almost everything business related about Baha Mar (even down to it's name) has direct implications and gross involvement of the Bahamian economy. Something is fundamentally wrong with the "guys in charge" of this project if they thought the government (who represents the people of this nation) would not react strongly.
If the points Prime Minister Christie raise regarding what took place at the negotiation table are true; then I agree wholeheartedly with the Bahamas' next move. If all Sarkis' team had left to do was withdraw the Bankruptcy filing in the US, and they still refuse to, then they leave the other parties no choice but to take strong reaction. Now more than ever, seeking Chapter 11 appears to be a selfish move on behalf of the Baha Mar owners to protect themselves from a failing project.
And by the way, whether you support the PLP government or not, please be reminded that any disrespect by a foreigner towards the Prime Minister of this country is actually disrespect to you as a Bahamian.
realfreethinker 8 years, 9 months ago
You talk about disrespect for the PM by foreigner? What about the disrespect and contempt the government shows to us as Bahamians.This project has been in problems for almost a year and our PM constantly told us all is going well. When it was leaked that Bahamar was having money problems, non other than the PM told us that is not true. He kept assuring us that all is well knowing that the bottom was falling out
newcitizen 8 years, 9 months ago
Ah, the ignorance of youth. Soon your eyes will be open to what really went down, a back room deal between our elected officials and the Chinese government.
I just hope you can maintain your enthusiasm as you grow older.
Millennial242 8 years, 9 months ago
Likelihood of some kind of alliances in the background --> probably. We don't have the right laws in place to really prevent that from happening.
Deals or no deals...fundamental issue still remains...Baha Mar is a business nightmare, and it's NOT just the fault of the government. All parties had an element to play in it. That doesn't mean one party should just "take their ball and run to the US".
I see your point about enthusiasm...good thing it's not fueled by what the government promises...because then i'd be in a really sad state. ;). Just here voicing an opinion.
newcitizen 8 years, 9 months ago
And honestly, I want you to know I'm do hope you continue with your enthusiasm towards making this a better place, and instill it in all of your friends. We need far more young people involved in the future of this country.
ThisIsOurs 8 years, 9 months ago
Do you remember everyone's shock when the PM blasted Izmiralian at the soft launch lat year? It was the first time the public had an inkling that something was wrong. This was the Prime Minister in the front of guests and international media. Disrespect?
And now this advice and legal opinion on an ongoing case in the Supreme Court??
HarryWyckoff 8 years, 9 months ago
The PM disrespects the people of the bahamas EVERY. SINGLE. DAY.
TalRussell 8 years, 9 months ago
Where's my shoe?
Comrades this is not a knock against the passionate good people over Creative Nassau, wanting to get their message out and who deserve to be heard and supported, but am I the only one listening-in who wanted take my shoe and throw it right through the damn radio while listening to Guardian Talk Radio's Carlton Smith who, how to host a good talk show that will keep your listeners tuned-in and advertisers happy, seems to have completely escaped his mindset.
Overnight the PM addressed the nation on the liquidation of Baha Mar, and all Carlton wants talk about, is the visions of the late Comrade Jackson Burnside. Yes, there is and should be a time and a place for all talk show topics and today is not one them.
Carlton is well on his way soon replace Chrissy Love's list show topics, and that ain't such an easy task for any talk show host master, much less a man's host?
ThisIsOurs 8 years, 9 months ago
Shortsighted indeed, and now Bahamar's statement that the negotiations are ongoing and the Bahamian delegation left BEFORE the talks were completed. What is our PM and AG trying to do to this country?
asiseeit 8 years, 9 months ago
FDI is going to dry up, Cuba is going to divert our tourist dollar and we are going to have some very lean years ahead. How we are even going to find enough U.S. dollars to cover our food import bill will be a challenge. Fun time ahead!
Well_mudda_take_sic 8 years, 9 months ago
AS I SAID YESTERDAY: Christie, Maynard-Gibson aka Wicked Witch and Gomez aka Minion will now seek to rob the Izmirlian family of their entire interest in the Baha Mar property physically located in the Bahamas by any means possible, which, when all is said and done, will be tantamount to a de facto confiscation by expropriation of the Izmirlian family's equity interest in the property for the benefit of Christie's new found Chinese friends. You can be rest assured every Bahamian government department, agency and corporation will be instructed not to assist the Izmirlian family or Baha Mar's representatives in any way whatsoever without the express approval of Christie or his Wicked Witch on his behalf. As for any legal actions to be heard in the Bahamian courts....well, we all know the influence that can be wielded at will over our courts by the Wicked Witch doing Christie's bidding. Of course it will take many years for the value of the Izmirlian family's equity interest in the venture to be determined by the eventual outcome of the legal actions properly brought by Baha Mar, as a last resort, before foreign courts in Delaware and the U.K. The only honourable thing Christie could possibly do now is dissolve parliament, but he is too delusional, self-infatuated and irrational to do anything honourable!
Well_mudda_take_sic 8 years, 9 months ago
AS "REALITY_CHECK SAID YESTERDAY: If delusional Christie, hissy tissy Maynard-Gibson and minion Gomez are fool enough to do as you say here, then the Bahamian people can be rest assured that no other significant foreign investors (other than the Chinese government) will ever invest in our economy. Foreign investors already here (except the Chinese) would also accelerate the selling-off of their hard property assets in order to make a clean exit from our shores as quickly as possible. Also, the Izmirlian family, through Baha Mar, would likely be justified in asserting very substantial legal claims (in foreign courts) against the Bahamian government for the added losses that would be incurred as a result of the vindictive conduct of Christie, Maynard-Gibson and Gomez. Any claims the foreign courts might award Baha Mar (the Irzmirlian family) against the Bahamian government would amount to mega-millions of dollars and would have to somehow be paid out of the hides of honest, hardworking and already over-taxed Bahamians.
sheeprunner12 8 years, 9 months ago
The Chinese will soon own Bahamar, Cable Beach and the Bahamian island of their choice ....... in return for opening the white elephant by the sea
This will be Perry's legacy ............... he sold the Bahamas to the Chinese for Bahamar
How can Perry put bahamar into liquidation without a sure fire sale deal with the Chinese ...... this is the Ingraham BTC sale ............. on steroids
Lord Jesus ........................ is my island up for sale?????????????
MonkeeDoo 8 years, 9 months ago
Sheeprunner12 - Wake up - Your island and Country have been sold !! Past tense !! Brave took the proceeds to Panama.
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