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Gov’T Urged: ‘Force’ Baha Mar’S Auction

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

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.”

Comments

lkalikl 1 year, 9 months ago

Christie and the PLP are China's 'lil bitch. All Bahamians should be outraged because while Christie and the PLP are in power, that makes all of us China's 'lil bitches. Thanks PGC and the PLP! Now f$%^ off and retire and let real leaders run this country.

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TruePeople 1 year, 9 months ago

how PGC could force anything when the Chinee gov't dem already own he bungy

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Bahamaland 1 year, 9 months ago

They would have to give back the $22m and the $20m him and Brave received for the Hilton deal...that's not gonna happen cuz he took it to Switzerland two weeks ago. Bahamians are fools and too passive...

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The_Oracle 1 year, 9 months ago

"Gentle Nudge"? Outright begging and prostration is no doubt the real strategy, and ain't working. The Chinese must've seen these idiots coming miles away, and are no doubt amused at each return! Meanwhile the Convention is postponed as it was no doubt planned to be staged at Bahamar.... maybe around 2020.

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John 1 year, 9 months ago

The government claims they snatched Bah Mar from the Izmirilin group and delivered it up to the Chinese in the interest of getting the property open in the quickest possible time. Yet the property sits there like an unopened can of corn beef. And like Izmirilian told the government, the Chinese are not negotiating with potential buyers in good faith or, seemingly, in the interest of getting the property completed and open. So what then is their motive? To keep Bah Mar under their control? At the expense of the entire Bshamian economy, having its credit downgraded even? THIS WHAT I SUGGEST: Give the Chinese another 90 days to find a buyer. Failing that the property will be returned to Zakis with a three year 'bankruptcy agreement'. Meaning Izmirilian will not be required to make any mortgage payments to China EXIM Bank for three years, which is the time the opening of the project has been stalled. Zarkis will then be given reasonable time to get the project completed and opened say a year, and will not have the Chinese breathing down his neck for another two years. Only the Chinese are benefitting from Bah Mar sitting idle.

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Jonahbay 1 year, 9 months ago

China has nothing but time to sit on this disaster. We the Bahamian people will suffer, they don't care about any of us. If our credit rating is downgraded that makes things easier for them. I think their goal is to buy the Bahamas and have us use their currency. It has been long known that we are a Nation For Sale, especially when the PLP is in power. Credit rating downgraded, junk fire sale. Nassau is burning and it is not just the dump...

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proudloudandfnm 1 year, 9 months ago

Perry dem got paid. They don't care one lil bit. They will never go against their Chinese masters....

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rjusa 1 year, 9 months ago

It truly makes me sad to view the current state of the Island. I am from the United States, first came to your country in 1980 on my honeymoon. My wife and I visited the Island 2-3 times a year for 10 years. When we were blessed with my son, brought him to Nassau when he was 6 months old and (he) has visited the Island with us roughly 2 dozen times.

In the late 1990's I started to do business in Nassau. Respecting your laws, I always insisted on an intern which I trained for the jobs I consulted on. These individuals were honest, intelligent, and "hungry" to succeed. At the end of consulting contracts, they were well prepared to take over, at times offering more talents than I brought. As a "mentor" I felt a certain sense of pride in their success.

I have not been to the island in roughly 7 years. This was approximately the time that the idea of BahaMar was being bantered about. What I saw was a business proposition being proposed that didn't consider the talent pool of the Bahamian people or considerations for the country. I was vocal on this issue in assorted bars and restaurants, as well in social meetings with businessmen and government officials. If you judge an investment to be viable, you don't attach caveats on its success. If attached, ask why...e.g., why a Chinese work force? Caveats on a "business deal" should raise a red herring. Would the Templeton Fund accept your investment if you dictated how they invested...don't think so. I would surmise that Chinese involvement never had the intention of the BahaMar concept being a true asset of the Island. Further, why in the heck would you allow the same entity to attempt to develop downtown Nassau?

I love your country, its people, and what it has to offer. However, in its current state, not optimistic. It may be a bit late owing to international skepticism, but I would nationalize BahaMar, find a way to correct property issues, then offer it to a legitimate investor group based on the merits of its location, the Bahamian people, and their pride in the Country and its past success.

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islandlad 1 year, 9 months ago

An observation and comment that I've may a couple times in the past.........The Gov't and the Court, while one would think would work with autonomy, clearly influenced (the court) by the many relationships that have conflict of interest. The entire "winding-up judgment" has been delayed/postponed how many times.......at least 3 and now isn't in May for yet another alleged date for the petition hearing....my point is, to the many issues highlighted in the report about, this kicking the can down the street has been a disaster and in my opinion is because the judge hasn't had the testicular fortitude, and under the pressure of the gov't not to, make a ruling already and get the ball rolling!

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