By NATARIO McKENZIE
Tribune Business Reporter
Prime Minister Perry Christie yesterday pledged that he would ensure “transparency and accountability” over Baha Mar’s sale by releasing the Heads of Agreement with Baha Mar’s purchaser once it is completed.
Confirming that Chow Tai Fook Enterprises (CTFE), the Hong Kong conglomerate owned by the Cheng family, had signed an agreement to acquire Baha Mar’s resort assets, Mr Christie promised that the secrecy surrounding the deal would eventually be breached.
He told the House of Assembly: “It is contemplated that CTFE will receive the concessions provided to Baha Mar as applicable. The Government intends to enter into a Heads of Agreement with CTFE to outline all obligations and concessions provided.
“It is fair to say that the categories of concessions being considered are not different than those offered by the previous government. This Heads of Agreement, the main terms of which have been agreed will shortly be completed, will not be shrouded in mystery and speculation as, once executed, it will be tabled to ensure transparency and accountability.”
It is unclear, though, whether the Government’s agreement with the China Export-Import Bank, Baha Mar’s secured creditor, for the project’s completion will be disclosed given that this has been sealed by the Supreme Court.
Mr Christie said this action, at the bank’s request, was not unusual in deals of Baha Mar’s complexity and market sensitivity.
“The Bahamian Supreme Court approved the sealing of the documents to ensure that the parties secure the best outcome for the property,” he said.
“A sale and purchase agreement has been executed. However, there still remains outstanding conditions and negotiations between the bank and CTFE for various ancillary agreements. Maintaining all court filed-documents under sealenables the bank and CTFE to finalise these negotiations with the normal business confidences that one would expect.”
Mr Christie also addressed concerns over the value, and nature, of the investment incentives (concessions/tax breaks) granted to both CTFE and the China Export-Import Bank/China Construction America (CCA).
He said: “I take this opportunity to nullify any suggestions that the Government has provided unusual concessions to conclude this deal.
“It is not unique to the Bahamas to provide concessions and encourage investment, and it is not unique to this project that concessions will be provided on a proportionate basis to the development.”
Mr Christie said the construction concessions provided to CCA are ‘identical’ to those granted by the former administration.
He added that the Government was also restricted by the ‘Most Favoured Nation’ clause in Atlantis’s Heads of Agreement, which requires that any incentives granted to another developer - and which it has not received - must also be given to the Paradise Island property.
Shortly after the Prime Minister’s address, CTFE released a statement confirming it has signed an agreement to own and operate Baha Mar.
Graeme Davis, president, of CTFE’s Bahamas subsidiary, said: “CTFE will dedicate significant, ongoing investment and resources towards the pre-opening and opening of Baha Mar.
“We will also ensure that the Bahamian people and the region benefit fully from the project, which will create tremendous job and economic stimulus opportunities.
“Further, by combining our global hospitality expertise with the vibrant and authentic Bahamian culture, we will create a memorable, unmatched experience for guests of which all Bahamians can be proud.”
The statement said CTFE was in discussions with Baha Mar’s previous operator line-up, Grand Hyatt, SLS Hotels, and its own subsidiary, Rosewood Hotel Group, to brand the resorts.
To prepare for the opening of the casino hotel and casino, CTFE is “onboarding” a leadership team from internationally-recognised brands. It plans to begin recruiting employees for the casino in the New Year, and is also in discussions to form marketing alliances with leading global gaming companies.