Sarkis’S Latest Baha Mar Offer ‘In Vain’


Tribune Business Editor


Sarkis Izmirlian’s latest offer to purchase Baha Mar is in vain because the project’s receivers and secured lender cannot negotiate deals outside the Supreme Court-approved sales process, Tribune Business was told yesterday.

Raymond Winder, Deloitte & Touche (Bahamas) managing partner, explained that neither he nor the China Export-Import Bank could talk to Baha Mar’s original developer outside of the formal sales process initiated last month.

Mr Winder, who together with two Hong Kong-based Deloitte & Touche partners is acting as Baha Mar’s receivers, said the Supreme Court approval for that process effectively barred them from entertaining any bids/offers that were submitted outside it.

This means that Mr Izmirlian’s April 11 letter to the China Export-Import Bank, reaffirming the Baha Mar purchase offer he made in January 2016, will be for nought, as the development’s financier cannot negotiate with him - even if it wanted to.

Mr Winder, providing further insight into the situation, said the receivers had “rejected all offers received” prior to launching the formal sales process.

He added that this move, and the structuring of the process to find a new Baha Mar owner, had been approved by both the Supreme Court and the joint provisional liquidation team of Bahamian accountant, Ed Rahming, and two UK-based colleagues.

“It is our position that any entity, and that includes Sarkis, the original developer, desirous of purchasing the resort, their offers have to come through the sales process we have agreed with the courts,” Mr Winder told Tribune Business.

“These bids will be assessed, and the best bid selected at the appropriate time. The matter is before the courts, and the courts have agreed a process to identify the potential bids, and select one of those bids as the ultimate purchaser for the property. That’s the process we’re going to follow.”

Mr Winder confirmed that Mr Izmirlian’s direct approach to the China Export-Import Bank earlier this week, which appeared to be an ‘end run’ around the Supreme Court-approved process, would not be considered unless it was submitted via this structure.

“Even if we wanted to negotiate one-on-one with Sarkis, we couldn’t do it,” he told Tribune Business, “and the bank can’t negotiate with him one on one. We can’t go making a deal with Sarkis.”

Mr Winder said the receivers had a duty to all creditors, not just the China Export-Import Bank, to maximise Baha Mar’s value in any sale. And the best way to achieve that is a process that invites a bidding war, not just negotiating with a single investor - whether Mr Izmirlian or somebody else.

“While Sarkis does have an interest in the project, there are other unsecured creditors that have rights in it, too,” he explained.

“It’s in the interests of those creditors,and Sarkis, that we select the best bid.”

Mr Winder’s comments effectively ‘nix’ Mr Izmirlian’s strategy of approaching the China Export-Import Bank directly, and will likely dampen some of the enthusiasm that was ignited earlier this week.

Besides Mr Izmirlian’s confirmation of his latest approach, the renewed optimism also stemmed from signs that he is ‘back in favour’ with the Government, as Prime Minister Perry Christie urged the bank to give the offer ‘due consideration’.

Mr Izmirlian must now compete with all-comers in a ‘beauty parade’, in which all bidders will battle on a ‘level playing field’ through having access to the same information. There is no guarantee he will win.

Still, the original developer remains well-placed to ‘buy back’ Baha Mar, given the ‘inside knowledge’ he and his former executive team still possess on what is needed to complete construction, plus all the commercial arrangements with hotel brands, retail and restaurant tenants, and suppliers.

No other bidder will possess such information, leaving Mr Izmirlian in a strong position to complete and open Baha Mar faster than anyone else.

His offer is also likely to be more favourable than most to this nation, given that he would be positioned to get Baha Mar’s 2,000-plus laid-off start back to work quicker than other persons.

Mr Izmirlian has also promised to make the China Export-Import Bank and all Bahamian creditors, including the contractors owed a collective $74 million, plus local suppliers and vendors, whole.

While these attributes will be especially appealing to the Bahamas and its economy, it remains to be seen whether the receivers would ‘go’ for another part of his plan - dumping China Construction America (CCA) as the project’s contractor.

Mr Winder’s revelations again indicate just how little control and influence the Government now has over the Baha Mar outcome. They also mean that the likes of Sir Sol Kerzner and his joint venture partner, Andrew Farkas; the Chinese-based Club Med and Cirque du Soleil owner, the Fosun Group; and the Mohegan Sun casino brand will all have to participate in the formal sales process if they want to buy Baha Mar.

All three have previously been named as groups who approached the receivers and China Export-Import Bank prior to the formal sales process launch.

That has so far seen the Deloitte & Touche receivership team hire Canadian-headquartered real estate firm, Colliers International, to market the Baha Mar development to all potential buyers worldwide.

Meanwhile, Mr Winder revealed that the receivers have allowed one of Baha Mar’s key vendors to repossess some $16 million worth of casino gaming equipment that had been leased to the mega resort.

He explained that the receivers could not justify the expense associated with continuing to lease PDS Gaming’s 630 slot machines and associated equipment, given that the casino is closed and their limited cash needs to be conserved.

“Those machines were installed over a year ago in expectation of Baha Mar opening in March 2015. We all know what happened then,” Mr Winder told Tribune Business.

“One of the challenges we were having is that slot machines depreciate pretty quickly, because of technology and the introduction of new games.

“As the casino is not open, we considered permitting the owner [PDS Gaming] to retrieve the machines the most appropriate action at this time. We don’t think we should pay the high leasing charges; we thought what they were looking for is too high.”

Mr Winder said the receivers tried to negotiate a lower lease payment with PDS Gaming, but were ultimately unsuccessful.

The removal of the slot machines started yesterday under the supervision of Baha Mar’s security staff and the Gaming Board, with all necessary regulatory procedures now completed.

Observers familiar with developments at Baha Mar said the machines’ removal was another sign of how the $3.5 billion development was continuing to deteriorate, and also indicated that no potential sale is imminent.

Mr Winder, though, said around 400 slot machines remained at the casino.

“While the removal of the machines is not the preferred option of the receivers, we’re confident a new investor will upgrade Baha Mar’s gaming offering,” he told Tribune Business.

“This development will enable future investors to choose the latest games and technology to offer to Baha Mar patrons, and provide a superior gaming experience once the resort opens.

“It’s difficult to justify this high lease if the machines are sitting there on the floor doing nothing.”

In court documents filed last year as part of Baha Mar’s Chapter 11 action, PDS Gaming alleged that Baha Mar was $701,008 in arrears on two casino equipment rental contracts by July 2015.,

These required it to pay PDS Gaming some $169,873 and $172,211, respectively, per month.

Peter Carey, PDS Gaming’s chief financial officer, alleged it had supplied Baha Mar with 1,100 gaming devices and associated equipment hardware for the casino under a January 27, 2015, contract.

Apart from the slot machines, this also included the equipment for Baha Mar’s Bally Technologies casino management system.


MonkeeDoo 4 years, 6 months ago

What Mr. Winder is saying is that they cocked it up, or got schmoozed by the Canadians. Its no wonder that Donald Trump has such disdain for the American fools that give their souls away for nothing. Yeah it's not just in America you find dummies I guess and that Canadian Realtor will be fat and happy when this country goes down the frigging tubes. How could they agree to such crap.


John 4 years, 6 months ago

"CAN RECEIVERSHIP BE STOPPED? The short answer is – yes, but only if you pay off the debt due under it before the date of Receivership. Alternatively, it is worth negotiating with the lender who has the charge on the assets to give you more time to pay, or to refinance if this is a realistic possibility.

The fact is does China Exim bank see the benefit in entering into negotiations with Sarkis Izmirilin then the bank can stop the receivership and make an agreement with Izmirilian. What are the chances of this happening? Slim but not impossible. But Considering the hostility originated with the Chinese (bank and construction company) then there will have to be some serious benefits for doing so. Like there being no other serious or qualified buyer on the horizon. One willing to eat up the terms the china bank is spitting out. And while the IMF revised China's growth foreccast for 2016 upwards, Chinese companies are expected to default on $163 billion worth of loans this year. The appetite for Chinese products have slowed drastically and China is expected to lay off and make some 6 million workers idle over the next few years. You can't drink plenty coffee and have white teeth for for long so the intentions of the Chinese will soon be revealed. And election soon come.


Well_mudda_take_sic 4 years, 6 months ago

No matter how hard this big dried up lemon is squeezed, it will never produce any juice (profits) for anyone down the road except the senseless greedy lawyers, accountants, realtors and consultants who are presently involved in mashing it into worthless pulp before it must be given away because no fool in their right mind would ever buy it. Trump was quoted as saying: "Me buy Baha Mar? No. I would never buy that property......it's in the Bahamas you know." Enough said!


BaHad 4 years, 6 months ago

This project has produced plenty of juice for quite a few. Lot's of people got 6 digits plus as part of their being awarded work. The PM I'm sure knows who all these are. I'm sure he had a hand in preparing the list.


John 4 years, 6 months ago

Bah Mar reminds of the calypso song called "tak ya meat out me rice." Its a song about two WCaribbeans, one had some meat (lets say a jamaician) and the other had some rice(a bahamian, no not Chinese). So they decide to cook a pot together called 'meat 'n rice.' Well when the pot almost done (like Bah Mar) the Jamaican fella say he think he should get a bigger share because 'de meat more expensive dan de rice.' But the Bahamian insist that the agreement was to share the pot equally. In fact he gone so far as to tell the Jamaican if he didn't wan share the pot equal, then he could jes tak he meat out de rice.' Well anyone who know about Caribbean cooking that once the meat cook in the rice it flavor the rice, so at this point if the Jamaican took the meat back he would only be left with meat but the Bahamian will have meat flavored rice...So it is with Bah Mar...who getting juice/


Economist 4 years, 6 months ago

Just think if the government had left the Bankruptcy alone.


MonkeeDoo 4 years, 6 months ago

Yeah, Christie & Maynard Gibson Juice the Bahamians BIG TIME !


Emac 4 years, 6 months ago

And when did this government and its long list of cronies start paying attention to anything the Supreme Court of any other court hands down???


sheeprunner12 4 years, 6 months ago

Yes Monkeedoo .......... the Bahamas was JUICED by Allyson Maynard Gibson, Fred Mitchell, Perry Christie, Baltron Bethell, Shane Gibson and Bradley Roberts ......... they are now trying to spin this on Izzie and the Chinese, but they had the trump card and played it foolishly ..... we will probably be looking at a closed Bahamar for another decade at this rate ..........it will eventually be opened by the Chinese themselves for whatever purpose their government deems necessary as it really now is officially Chinese government assets .............. that is the sad truth


John 4 years, 6 months ago

So Raymond Winder say Sarkis latest offer was in vain because Bah Mar is in receivership and under the control of the supreme court. Yet the Perry Christie led government was not only able to get permission to cause the convention center to be completed but also able to host a week long convent in a property that is in receivership and supposedly on the market for sale. Now tell me what kind a deal that is?


MonkeeDoo 4 years, 6 months ago



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