By NEIL HARTNELL
Tribune Business Editor
An ex-Baha Mar director yesterday urged the Government “to force” the Chinese to auction the $3.5 billion project off to the highest bidder, adding: ‘Gentle nudging ain’t working.”
Dionisio D’Aguilar told Tribune Business that the Bahamian national interest compelled the Christie administration to now “flex its muscles and take on the big bad dragon from the East”, given the stance seemingly adopted by Baha Mar’s $2.45 billion financier.
He said the interview given by Sir Sol Kerzner’s partner, Andrew Farkas, over how they were unable to make an informed Baha Mar bid because the China Export-Import Bank was not providing any due diligence information or entering into serious negotiations, showed the property could be sat idle for years.
Suggesting that the bank’s desire to recoup 100 per cent of its outlay was impossible, given Baha Mar’s current condition and the attitude of potential buyers, Mr D’Aguilar said the Government had no choice but to intervene more aggressively for the Bahamian economy’s well-being.
He expressed concern, though, over whether the Christie administration was so “hooked on Chinese investment” and maintaining a relationship with Beijing that it would seek to avoid a confrontation with the China Export-Import Bank.
“I’m not surprised at all that the bank has basically not responded to them,” Mr D’Aguilar told Tribune Business of Sir Sol and Mr Farkas’s bid, “and won’t engage them.
“The bank, in my humble opinion, has no interest in selling this at a loss, and I think the Government has to force the situation. Are they willing to take the next, necessary steps to force the China Export-Import Bank?”
Mr D’Aguilar stopped well short of advocating that the Government seek to nationalise the Baha Mar project, given the potential damage such action could have for the Bahamas’ reputation among other international investors.
Instead, he called on the Christie administration to force the China Export-Import Bank to conduct an open, transparent sales process for Baha Mar, with all bidders provided with the same information and terms. The project would then be sold to the highest bidder at auction.
Based on the evidence provided by Mr Farkas, Mr D’Aguilar added: “The Chinese bank is not willing to budge, is not willing to make a deal, and not interested in entertaining any proposal that does not say it will receive 100 cents on the $1.
“We know no one will offer them 100 cents on the $1. It now behooves the Government to move the Export-Import Bank.”
Mr D’Aguilar added that, if it did not, it would be “to the detriment of every Bahamian”, and the Government would “have to get used to the idea that this project will not proceed” to completion and “sit there year after year”.
“It’s in the national interests of the Commonwealth of the Bahamas to force the Chinese to make a deal,” he told Tribune Business. “Perry Christie has to realise this could destroy our economy if not dealt with expeditiously, and only he knows what needs to be done.
“The Chinese have misled the Government, have caused enormous damage to the economy of the Bahamas, and the credit rating of the country. There’s certainly a case for them to force a sale of the property to get it up and running.
“It’s causing untold damage to Bahamian creditors and contractors, and to our debt and credit rating. This is not a small deal; this is not a $150 million project. I’m just hoping that they’re not so hooked on Chinese investment that they fail to act in the best interests of the country,” Mr D’Aguilar added.
“The Government appears to be very pro-Farkas and pro-Kerzner, but they’ve thrown up their hands in disgust. If they can’t make a deal, no one can.”
Mr D’Aguilar agreed it was possible that China Export-Import Bank was trying to reserve Baha Mar for a Chinese buyer, with several sources suggesting yesterday that this is indeed what is happening.
The Fosun Group, China’s largest privately-owned conglomerate, and the Club Med chain’s owner, is already said to have looked at Baha Mar. And there have been suggestions that, in exchange for making the China Export-Import Bank whole, a Chinese buyer would be ‘repaid in kind’ via soft or concessionary loans (low interest rates) on future projects.
“If they’re reserving it for a Chinese company, why not put it into liquidation, make something happen?” Mr D’Aguilar questioned.
“The Government needs to force the Chinese now. They’ve received proposals from reputable bidders, but they’re not interested, and are not giving information. They’re just sitting on the asset because they’ve got time to wait.
“The Government has to start contemplating that this sits there for years and years, or make something happen. It must, at this stage, begin to realise its made a mistake, has backed the wrong horse, and now needs to consider its practical options to force them to auction it off,” he added.
“The Bahamas is a sovereign nation, and can force them to do many things. They [the Government] need to flex their muscles and take on the big, bad dragon from the east.
“The Chinese aren’t budging to the gentle nudging. They need a kick to move forward. Gentle nudging ain’t working.”