The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The parties to the $3.5 billion Baha Mar dispute were yesterday said to be participating in “satellite meetings”, as talks seeking to achieve a commercial resolution to the impasse continued.

Sources familiar with developments confirmed that the joint provisional liquidators were continuing to meet with “individual parties”, including representatives from Baha Mar, its Chinese partners and the Government.

“They are still meeting right now,” one source told Tribune Business. “Satellite meetings with the individual parties are continuing. They’ve been at it all day.”

This newspaper was told that the meetings are taking place at Baha Mar’s offices, and in its Board room, with another contact adding: “There have been a number of people going in and out, but the participating parties are meeting with various people.”

This all suggests that Baha Mar’s joint provisional liquidators, the team of Bahamian accountant, Ed Rahming, and the UK-based Alix Partners duo, Alastair Beveridge and Nick Cropper, have been meeting individually with representatives for Baha Mar’s developer, namely Sarkis Izmirlian, the Government, China Export-Import Bank and China Construction America (CCA).

This is in contrast to last week, when all parties were present at the same time for negotiations aimed at achieving a commercial resolution before the November 4 winding-up petition hearing that would put the Baha Mar development into liquidation.

Sources close to the joint provisional liquidators yesterday confirmed that the talks involving all parties ended on Saturday.

“They will continue to engage with the stakeholders as a part of the process,” a contact close to them added, confirming that the talks were confidential given “the delicacy of this matter”.

Tribune Business was told that all official information on the talks will be coming from the joint provisional liquidators who, as agents of the Supreme Court, have been tasked with trying to devise a commercial out-of-court settlement to the Baha Mar dispute.

“I think that they’re encouraged by what has happened,” one source said of Mr Rahming and his colleagues last week.

The joint provisional liquidators’ appointment, and the dismissal of Baha Mar’s Chapter 11 bankruptcy protection filing in Delaware, have handed the negotiating advantage to the Chinese and the Bahamian government.

With his family’s $850-$900 million equity stake jeopardised by the November 4 winding-up hearing, Mr Izmirlian may be forced to choose between accepting a bad deal or losing 13 years’ worth of work and investment.

Baha Mar will likely have to abandon its goal of dumping CCA as the lead contractor, with the Chinese also probably pressuring it to drop the $192 million legal action against its parent in the UK.

And there will also probably be demands that Mr Izmirlian come through with the guarantee that China Export-Import Bank is demanding in order for it to cover 50 per cent of Baha Mar’s additional financing needs.

It also remains to be seen whether Mr Izmirlian is able to wrest from CCA a committed timetable for Baha Mar’s completion, along with penalties for missing dates and targets.

And it is uncertain whether the Chinese may simply ‘wait out’ the provisional liquidation process, in a bid to remove Mr Izmirlian, and look to seize the $3.5 billion project for themselves.