EDITOR, The Tribune.
The decision of the Delaware District court to reject most of Baha Mar’s Chapter 11 petition does not put to an end the search for an out-of-court negotiated settlement, prior to the deadline of November 4.
Surely our government and all other claimants would prefer this solution to long, drawn-out proceedings with our Supreme Court supervising liquidators, however competent they may be. The largest creditor, Chinese EXIM Bank, would much rather have its $2.5 billion loan repaid on some agreed schedule rather than seizing the unwieldy project and going into the resort-hotel management business on a vast scale.
I note that, in late June, the Baha Mar Board of Directors passed resolutions (available on-line) appointing the firm of Moelis & Co as its financial adviser with regard to the bankruptcy and any possible arrangements to keep the company in business. Moelis is a relatively new international investment bank and restructuring specialist, founded only in 2007 but already operating from 17 world-wide offices and showing a track record of successfully completed transaction for major clients such as American Airlines. In 2014 Moelis shares were publicly issued, so the company is listed on the New York Stock Exchange and releases detailed information about its business, with summary descriptions of actual deals.
Among many others, one can read about the restructuring of nearly $50 billion of debt and equity of “Dubai World”, resulting from a spate of overbuilding by both state and private ventures that nearly brought the Emirate of Dubai to its knees in 2008. The complexity of the re-organisation makes Baha Mar’s look like child’s play. Moelis set up a new insolvency regime for Dubai, based upon the US Chapter 11 and the English system, compromised many claims, and arranged $10 billion of new debt from the next-door emirate of Abu Dhabi.
I have no inside information what Moelis may be discussing to resolve the squeeze on its client Baha Mar and its owners, the Izmirlian family. But I would not be surprised if its executives were already in highly confidential negotiations with government, the liquidators and the Chinese. I am sure their services do not come cheap, but I trust Judge Winder will not stint in approving payment by the “debtor in possession” of any fees to an experienced advisor to avoid lengthy court-supervised winding-up proceedings.
RICHARD COULSON
Nassau,
September 16, 2015.
Comments
Well_mudda_take_sic 8 years, 7 months ago
At the end of the day the Chinese, on a net basis, have no more invested in Baha Mar than the Izmirlian family, perhaps the equivalent of USD 1 billion at most. Monies from the credit facilities extended by China EXIM Bank went into the pockets of the Chinese construction company, the Chinese sub-contractors and all of their Chinese workers involved with the project. The conflict of interest in having Chinese financing married with Chinese construction/labour all but assured profits for the China state controlled enterprises would be padded as much as possible by the cutting of corners at the work site, which no doubt has resulted in hidden poor quality workmanship throughout the project that will cost hundreds of millions of dollars to fix. A full blown costly investigation by non-Chinese engineers would need to be done to reveal all of the serious shortcomings in the quality of the Chinese workmanship that has no doubt left the project's structures unsafe in many respects. The Chinese obviously put monies in other non-Chinese Bahamian pockets (and I'm not just talking about local Bahamian contractors!) in order to bring things to the failed state where they are today, leaving many poor Bahamians and Bahamian taxpayer left holding the proverbial empty bag. It's all about the bigger picture Coulson.......a massive screwing of the Bahamian people by the Chinese crawling into bed with our greedy corrupt dimwitted politicians (in the same way they have done throughout much of Africa....starting with a stadium)......and we Bahamians all know the ones at the top of that very greedy list of self anointed political elite in our country who could not care less about the Bahamians who foolishly voted them into office!
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