The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Up to 600 Baha Mar jobs could have been saved had the project’s joint provisional liquidators secured $16 million in additional funding, Tribune Business can reveal.

This newspaper’s contacts said the 2,026 staff cuts would not have been as deep had the team of Bahamian accountant, Ed Rahming, and UK duo, Alastair Beveridge and Nick Cropper, been able to convince the four parties to the Baha Mar dispute to supply the extra financing.

While it was unlikely that the 1,442 Baha Mar staff already ‘sitting at home’ could have been saved, Tribune Business was told that some of the 584 employees still ‘actively’ engaged at the development site - and who were given notice of their termination yesterday - might have been retained.

Tribune Business was told that the joint provisional liquidators’ lay-off programme, which was approved by the Supreme Court, would “certainly not have been to the level they had to do today” had the extra $16.662 million been forthcoming.

Mr Rahming and his colleagues, in a letter to Baha Mar staff, effectively confirmed they had been unsuccessful in raising the total $25 million deemed necessary to cover the costs likely to be incurred by the two-month joint provisional liquidation.

“The provisional liquidators have urgently sought to obtain external funding, and whilst their efforts in this regard are continuing, to date limited sources of funding have been identified,” Messrs Rahming, Beveridge and Cropper said.

“Following our review of the financial affairs of the companies, it is clear that the companies would not have sufficient cash available to continue to meet all operating costs, including maintaining employment at existing levels.

“I am therefore writing to advise that due to the perilous financial position of the companies, the provisional liquidators have today made the decision to implement an employee redundancy plan in respect of Baha Mar Ltd and Baha Mar Enterprises .

“This will result in a significant number of employees being made redundant as of 23 October, 2015, and a reduced workforce being retained to assist the provisional liquidators in continuing to preserve and maintain the Baha Mar project.”

Tribune Business was yesterday told that some 350 persons will remain employed by Baha Mar following tomorrow’s terminations.

Sources familiar with the situation told this newspaper that while the joint provisional liquidators had successfully obtained the $9.5 million balance owed by the Government to Baha Mar for the West Bay Street re-routing, and convinced the China Export-Import Bank to pay the $8.7 million property insurance premium due on the resort campus, requests for the additional $16.662 million had fallen on ‘deaf ears’.

This was despite appeals to the four parties to the Baha Mar dispute - the developer, Sarkis Izmirlian; China Construction (America); the China Export-Import Bank; and the Government - to provide the extra $16.662 million.

“The companies are financially insolvent, the liquidators have run out of cash, and they are still working with the parties to move the project forward,” one source close to the Baha Mar situation, speaking on condition of anonymity because they were no authorised to speak to the media, told Tribune Business.

“They couldn’t afford to keep the employees at the cost they were costing, and they have not been successful in securing the interim financing. At this point, they’ve just not been able to raise any funding, and the monies they have won’t suffice.”

The source added that even had the $16.662 million been forthcoming, it was unlikely the 1,442 ‘non-active’ Baha Mar employees could have been retained because doing so was “not consistent” with the Supreme Court mandate for the joint provisional liquidators to preserve and maintain the $3.5 billion project’s assets.

Tribune Business previously revealed the joint provisional liquidators’ likely costs, which were contained in a late September affidavit filed with the Supreme Court by Mr Rahming.

“In order to defray the costs, excluding the insurance costs, to maintain and preserve the assets of the seven entities in provisional liquidation, the joint provisional liquidators require authority to borrow up to the sum of $16.262 million,” he alleged.

“By granting the joint provisional liquidators the authority to borrow this sum, we verily believe that we will be better able to comply with our mandate under the provisional liquidation orders to preserve the assets of the companies.”

The likely source of the $16.262 million was not disclosed in Mr Rahming’s affidavit, but given that Baha Mar was in provisional liquidation, the joint provisional liquidators were likely relying on the Chinese to carry them through to November 2 - the date when the Supreme Court will formally hear the winding-up petition.

The 1,000 staff employed by Cable Beach Resorts, the Baha Mar company that owns the Melia Nassau Beach Resort, are not impacted by yesterday’s termination announcement.

Their salaries will continue to be paid as normal from the daily operations of the hotel.