The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Opposition’s deputy leader yesterday argued it was too early to determine if the Government’s Baha Mar ‘winding-up’ strategy had been “vindicated”, adding that “only time will tell”.

K. P. Turnquest, speaking in the wake of the Delaware Bankruptcy Court’s decision to dismiss Baha Mar’s Chapter 11 cases, told Tribune Business that the verdict may have “propelled the inevitable” in forcing the warring parties to come to the negotiating table.

With every indication suggesting that the developer and its Chinese partners were “not motivated” to reach a negotiated commercial settlement until now, Mr Turnquest acknowledged that the verdict had made it “much more difficult” for Baha Mar’s principal, Sarkis Izmirlian, to develop a viable rescue plan for the $3.5 billion project.

He added that much now “depends on the efficiency” of the Supreme Court’s joint provisional liquidators in trying to resolve the dispute and get the development open, if the Bahamas is to maintain its ‘investment grade’ sovereign creditworthiness.

“I think that it doesn’t surprise us, given the proceedings in the Bahamian courts,,” Mr Turnquest told Tribune Business of the Delaware Bankruptcy Court’s decision to dismiss the Chapter 11 actions.

“As the judge had already indicated, it not seem to the outside observer that the parties involved were tremendously motivated to negotiate. It may have just propelled the inevitable.

“Hopefully, with that particular action behind us, it will bring all parties back to the table with the provisional liquidators as independent parties seeking a resolution to take the project to completion.”

While unsure how Mr Izmirlian will respond, Mr Turnquest added: “The decision makes it much more difficult for him to come up with a viable rescue solution.”

And, asked whether the Delaware verdict showed the Government’s intervention, and winding-up petition strategy, had succeeded, the east Grand Bahama MP repled: “I don’t know if vindicated is the word I would use.

“Certainly, it seems to be a victory in this round. Whether that inures to the benefit of the Bahamian people in the long run, time will tell.”

With Moody’s and, in particular, Standard & Poor’s (S&P), both largely basing future assessments of the Government’s creditworthiness on how rapidly Baha Mar is completed and open, Mr Turnquest said much depended on the provisional liquidators if this nation was to avoid another rating downgrade.

“S&P and Moody’s have given us fair warning that something needs to happen,” the FNM’s deputy leader told Tribune Business, “and hopefully all the parties understand the seriousness and significance of this, and that it motivates them to come together to sort out a resolution..

“It all depends on the efficiency with which the liquidators are able to get the project back on track or find a buyer to put it back on track.”

The provisional liquidators, Bahamian accountant Ed Rahming and his UK colleagues from AlixPartners, yesterday acknowledged that they were undertaking a “massive” task in analysing years’ worth of Baha Mar documents so that they could better understand its financial situation and operational issues.

“These things are not simple,” Mr Turnquest emphasised. “There’s a lot involved here. While I have confidence in Mr Rahming and his team, it takes time for them to come up to speed, figure out the way forward, get the additional financing required and funding to maintain operations.”