Baha Mar sale process begins


Tribune Business Editor


Baha Mar’s receivers have launched a formal sales process for the stalled $3.5 billion project by hiring a Canadian-headquartered real estate firm to market it to potential purchasers.

Raymond Winder, Deloitte & Touche (Bahamas) managing partner, told Tribune Business that the move to engage Colliers International was “a very important step” towards resolving the problems plaguing the Cable Beach-based development.

And he expressed hope that the move would give Bahamians “the sense there’s light at the end of the tunnel” over Baha Mar, and the negative impact its failure has had on job creation, economic growth and business/investor confidence.

Confirming Colliers’ hiring when contacted by Tribune Business, Mr Winder said the Toronto-headquartered company was “just getting started” on marketing Baha Mar to potential buyers.

He added that the appointment, and sales process’s launch, had been approved by the Supreme Court, and said: “This is a very important step from the standpoint that, to the extent we could identify a potential buyer of the property, it solves a number of problems.

“It solves the ownership issue, and it also solves the construction issue, in terms of the completion of the project, so this is a very important step.”

Mr Winder, though, said the receivers and the China Export-Import Bank, have yet to decide who will be responsible for completing construction of the $3.5 billion resort campus.

“That hasn’t been decided,” he told Tribune Business, “but we have been exploring all avenues to begin the process of [construction] mobilisation.

“As to who’s responsible, that hasn’t been decided. That could be the purchaser or it could be an independent third party, depending on how long it takes to identify a purchaser.”

Baha Mar’s original developer said the project’s construction was “97 per cent complete” when it filed for Chapter 11 bankruptcy protection at end-June 2015.

However, Prime Minister Perry Christie said late last year that the construction completion cost had risen to $600 million- a figure double the $300 million that was being discussed between Sarkis Izmirlian and his Chinese partners

Resolving Baha Mar’s physical completion is significant, given that it has the potential to deter potential buyers - real estate developers, and hotel/casino operators and brands - who do not want to inherit a construction project.

The construction aspect, combined with marketing and other necessary pre-opening costs, could mean that any Baha Mar purchaser could incur expenditure approaching $1 billion prior to enjoying any return on their investment.

The outstanding construction work will also likely affect the purchase price offered by potential buyers, which in turn may impact the China Export-Import Bank’s willingness to sell.

Baha Mar’s $2.45 billion financier, which took control of the project after the Government successfully petitioned for the appointment of joint provisional liquidators, had made clear it wants to recover 100 per cent of its investment.

Numerous Tribune Business sources have estimated that the maximum the bank is likely to receive, based on Baha Mar’s current condition, is $0.50-$0.60 on the dollar - well short of the China Export-Import Bank’s ‘make me whole’ goal.

Prime Minister Perry Christie, in his mid-year Budget address, said Baha Mar’s lender was talking to the project contractor’s parent, China State Construction Engineering Corporation (CSCEC), about remobilising to complete the project. This indicates China Export-Import Bank is open to financing completion itself.

Mr Winder, meanwhile, expressed hope that Colliers’ appointment would show Bahamians that he and his fellow receivers were “not just sitting here”.

“At least it gives individuals a sense that we’re moving the process forward, and we’re not just sitting here,” he told Tribune Business.’

“It gives the sense that there’s light at the end of the tunnel, and we’re doing things to ultimately move the project forward.”

Mr Winder confirmed that Baha Mar was that largest, and “most complicated”, receivership/liquidation case he had handled in his career.

“There are many, many moving parts,” he said, adding that no definitive timelines had been set for either Colliers or the sales process’s completion.

Potential Baha Mar purchasers must sign a non-disclosure agreement (NDA), and pay a $50,000 nonrefundable deposit, before they can gain access to an electronic data room containing all information necessary for them to conduct due diligence on Baha Mar. The NDA is to be governed by Bahamian law.

Marketing materials distributed to potential buyers by Colliers, and which have been obtained by Tribune Business, describe Baha Mar as “substantially complete”.

A so-called ‘teaser’ document, designed to whet buyer appetites, says: “Baha Mar is the largest integrated resort under construction in the Caribbean, with total estimated investment of over $3 billion.

“Covering an area of approximately 1,000 acres (400 hectares), this substantially completed project includes four luxury hotels, one casino, a convention centre, and one TPC-class golf course, which are under construction, and a hotel [Melia] which is in operation.

“Receivers were appointed over the project, and have retained Colliers International Hotels to assist in the international marketing of the property in an effort to seek potential purchasers.”

Most of the project details are well-known to Bahamians, although the marketing documents largely gloss over Rosewood’s decision to exit as one of the hotel operator brands.

They simply refer to a 240-room ‘five-star luxury hotel’, but the Colliers document makes clear just how important Baha Mar is to the Bahamian economy and society.

“As the largest integrated resort in the Caribbean, this project will create thousands of permanent jobs for the local community, greatly contributing to the economic growth of the Bahamas,” potential buyers are told.

“The project has commanded the attention of the Government of the Bahamas, which is willing to provide special assistance for the opening of the resort.”

The nature of this ‘special assistance’ is not detailed, but the documents add that “good relationships between the Bahamian and Chinese governments, where an airline framework agreement and visa waiver agreement are in place, augurs well for future direct flights from China to the Bahamas”.

Colliers’ hiring confirms that the Baha Mar impasse is set for a ‘long workout’ that is likely to last at least several months.

Tribune Business understands that the China Export-Import Bank’s advisers have been urging it to launch a formal sales process for Baha Mar for some time, via a ‘beauty contest’ where all potential bidders are provided with the same information so they can determine their price.

Such a process will also address the concerns expressed by Sir Sol Kerzner’s partner, Andre Farkas, who told Tribune Business previously that they were unable to access the information essential to conduct proper due diligence on Baha Mar.

Tribune Business obtained the Colliers document from Bahamian real estate contacts. They questioned whether any local realtors were working with the Canadian firm on the sale, given that only by Bahamas Real Estate Association (BREA) licensed professionals can sell real estate in this nation.

Colliers International, which employs 16,000 people in 66 countries, has experience in marketing Bahamas-based resorts to prospective purchasers, having fulfilled the same role over the British Colonial Hilton’s recent sale.

The buyer then, ironically, was China Construction America (CCA), the main contractor for the Baha Mar project.


GrassRoot 8 years, 2 months ago

"It solves the ownership issue, and it also solves the construction issue, in terms of the completion of the project, so this is a very important step.”

another delusional Bahamian.


GrassRoot 8 years, 2 months ago

if they think that a buyer will make good on the invoices issued by Bahamian business, they are in lala land.


SP 8 years, 2 months ago

............. PM Perry Gladston Christie was just blowing more smoke up our ass's! ..............

Christie told the nation over and repeatedly he already had a solution to Baha Mar that was imminent. Now its just listed with Colliers International?


Where and when does the lies start and the truth begin? Just wondering.


GrassRoot 8 years, 2 months ago

a process like that will take at least 6 to 9 months. I will take Collier a month to understand the mandate, and then they have to apply for work permits in the Bahamas so they can conduct the business of selling. The reality is also that there are not many groups with substance that can buy this white elephant.


JohnBuchanan 8 years, 2 months ago

I am the U.S. journalist who got the scoop for Hotel News Now on March 24, 2015 that the alleged "opening" of Baha Mar supposedly scheduled for the next day was a scam, a fraud -- by Izmirlian and his "management team," including his PR team, who blatantly lied to me and many other reporters. This "news" from the receivers is absurd. You have to be insane to think a reputable, smart buyer can be found for a multi-billion project that is incomplete, rotting away by the day in the sun, tied up in litigation in the UK, and with a financier who wants to be "made whole." I have tried to keep an open mind about Baha Mar and hope for the best for the people of the Bahamas, but at this point -- as an expert on the project and the hotel industry -- I predict Baha Mar will never open. I say that largely because if Sol Kerzner could not make a deal -- when he clearly wanted to -- nor could any of the other players who looked at it, no one can. It's dead. Instead of being too big to fail, it's too big (and expensive) to succeed. Sad, but true.


sheeprunner12 8 years, 2 months ago

You cut and paste this message from a year ago??????? ........ WOW!!!!!!!!!!


JohnBuchanan 8 years, 2 months ago

I didn't "cut and paste" anything. I read this article today and posted a response. On the other hand, the situation hasn't really changed that much since I wrote my Hotel News Now story and it was published a year aqo day after tomorrow -- and two hours later, Baha Mar shut down. Two months later, Izmirlian filed for bankruptcy. The rest is history...


Sickened 8 years, 2 months ago

Time for you to look for another story man.


i_land_boy 8 years, 2 months ago

John, i have looked at your twitter feed. it is all negative, you seem to have nothing nice to say about anyone. I am not sure what your purpose is stirring up dissent over here in the Bahamas, perhaps some well hung Bahamian stole your lady, or possibly you got swindled in on Bay Street. In the end you are a nobody here in the Bahamas, and really have no business stirring up the pot. Fortunately this project is not deteriorating into pieces like you have stated, it is still shiny and relatively new. I am not trying to validate this project, or even vouch for anyone involved, I am just a bahamian citizen hoping for the best for his country, and wondering what purpose you even have by trying to cause trouble here. please explain what you are doing here.


JohnBuchanan 8 years, 2 months ago

My interest is purely journalistic. And the Tribune is a newspaper. I have no personal interest in what happens to Baha Mar, one way or the other. Like anyone else, I have a right to state my opinion. And the opinion I stated here is based primarily on facts. You, too, can think whatever you want. We'll all see in the end how it turns out. But perhaps if Baha Mar does not get sold and open, you'll have the integrity to admit you were wrong. And if it does, I will happily do the same.


paul_vincent_zecchino 8 years, 2 months ago

Your post has a familiar reek to it. Haven't you posted this previously?

Why post it again? It didn't play well the first time, why do you believe it will play well a second time?

Why make this the fault of Mr. Izmirlian, when clearly it's the chicoms and the PLP who are engaging in their usual chicanery?

Izmirlian is the fall guy? Isn't that what the bad guys always do in a Constructed Fraud, blame the target, the guy who loses his money, the one whom they fleece?

You're a journalist, y'say? Where can we find a sample of your other writings? On the walls of the caves?


JohnBuchanan 8 years, 2 months ago

Since you want to prove publicly you're an idiot, here are just a few random samples. The first one is from The Conference Board Review, a global business journal published for senior executives of the Fortune 1000. The rest are pretty self-explanatory, including my now infamous Baha Mar story from a year ago. Care to apologize?


My Baha Mar scoop that shut it down two hours after publication: http://www.hotelnewsnow.com/Articles/...">http://www.hotelnewsnow.com/Articles/...

Another major scoop that got picked up by major U.S. news network and debated in Congress: http://forward.msci.org/mission-impos...">http://forward.msci.org/mission-impos...

REUTERS (byline at the bottom): http://www.reuters.com/article/us-fin...">http://www.reuters.com/article/us-fin...


For the record, I've been a journalist for 45 years. My first job was on The Hudson Dispatch in Union, City, NJ. My work has been published in more than 100 newspapers and magazines in the U.S. and around the world. Proud of yourself for being such a fool?


Gladiator 8 years, 2 months ago

John I understand your animosity towards the project as you were apparently lied to by the management team but surely you can't be stupid enough to think that the place will NEVER open. Kerzner could not make a deal because he had no information that he could use in order to make a real offer. I don't expect it to open any time soon but to say that it will never open is pretty naïve of you. Other projects just as large have been in the same situation and eventually they were bought and opened, it was just a matter of time. It is clear that you are looking at this subjectively rather than objectively for your own personal reasons.


JohnBuchanan 8 years, 2 months ago

In essence, I agree with you. I also wrote extensively at the time (2008-09) about the gigantic City Center project in Las Vegas, which almost went under and almost bankrupted MGM Resorts, which operates multiple major casino hotels in Las Vegas and elsewhere in the U.S. and world (including Macau in China). The difference is, Izmirlian is not MGM Resorts. I talked just yesterday with several hotel experts (to discuss the Tribune story) and also the Editor of a major U.S. hotel business publication. And they agreed unanimously that it is increasingly unlikely Baha Mar will be sold -- and open. The reasons are complex and not easy to explain in three sentences. But what it really comes down to is the fact that the project, from the start, was too big and too expensive to operate for today's resort market. It made sense 12 or so years ago when Izmirlian started, but no longer. Whether you agree or not, that is the consensus of hotel experts in the U.S. And I know many of them from my work. And for the record, I have no animosity for Baha Mar. My interest is in the Bahamian people and your economy. Baha Mar was supposed to be a good thing for the Bahamas. Now it stands as a disaster. I just hope that changes. And if I turn out to be wrong, I will be the first to admit that. But I make my living by assessing and reporting facts, regardless of what industry I'm reporting on. Thanks.


themessenger 8 years, 2 months ago

Thanks for the insight John, not all of us who live here are as myopic and xenophobic as some who regularly post and not all of us are in the habit of shooting the messenger simply because we don't like the message. Please continue to keep us abreast of Baha Mar developments as you hear of them.


JohnBuchanan 8 years, 2 months ago

Will do... thanks. And I cannot stress enough that I HOPE I and the others who think BM is dead are WRONG. I have been coming to the Bahamas for 35 years, both as a professional travel writer and vacationer, and I love the Bahamas and the Bahamian people. What I care about most is seeing those 2,000 lost jobs saved. Thanks again for your response. We'll all see what happens...


SP 8 years, 2 months ago

Hold fuc*i%g on everybody. PM Christie will soften the blow with help and hope...Lol

PM Christie is a good sport and real practical joker! "Let them eat mud pies like Haitians"


ForeignObserver 8 years, 2 months ago

Look over your shoulders. Obama and Castro are having a love fest. US hoteliers will be in Havana before guests are in Cable Beach . . .


happyfly 8 years, 2 months ago

John - recent leaked CSCEC emails suggest that CSCEC knew they were behind schedule and could not finish on time but lied to the developer knowing full well it would have disastrous consequences for the developer, which it did. Your so called journalistic objectivity may have missed a coordinated conspiracy between the various Chinese State Owned players and the PLP Government to set Izmirlian up, and your claim to fame is pimping their spin ?


JohnBuchanan 8 years, 2 months ago

Oh no, I saw all that when it was reported... what amazes me about the saga of BM is that everybody screwed up -- Izmirlian, his "management team," the Bahamian government and China. All I know from direct personal experience is that for both of my Hotel News Now articles reporting cancelled openings -- the first last in August 2014 and the second one a year ago -- is that Baha Mar and their PR person and PR firm (in Miami) lied to me and tried to kill my stories as "made up" and inaccurate. That should tell you a lot. But there's no doubt that China is a big part of the problem and that the Christie regime's ongoing love affair with China has played a big part in the disaster. I assume voters will hold him accountable when the time comes.


islandlad 8 years, 2 months ago

Not sure what all this hate is on John, the man is a reporter and reports the story....if you don't like the content, don't read. Yes, he re-engaged but to his point, he had contacts in the Industry and this is an on going story. There is so much blame to go around for all, but trust me when I tell you on good authority that the spending spree and ego driven marketing dollars that were invested leading up to the opening were not justifiable. To start, the tag line about being "Unlike what the world has ever seen" barely merits me commenting on it....seriously, let me just mention two and you can talk amongst your self from there....Vegas, Macau. Look, not sure id anybody saw the Baha Mar ad that played on network TV.....but it is so vague and makes no sense (Not to mention it was filmed in Croatia) and you only see a reference to Baha Mar at the very end with a logo..... $3.5 million....yes, they hired a producer who did the Cartier and Prada etc commercials. To artsy, no substance for a resort. Last thing I'll say, $250,000 plus expenses for a Fung Shay expert to come and give a blessing on the project....keep in mind this was after the fact, everything was already built and it was 10 months before opening so it literally was to spread holly water on what was already done......... Oh, by the way, this anti-ex pat rhetoric needs to stop, it's ok to have pride in your country, but some of these comments are borderline nationalistic and quite frankly insulting. This whole we are "entitled" mentality must stop! There is a reason why there is an entire study done after WW1 and WW2 about being a isolationist country. Again, while I appreciate the national pride Bahamians have, there seems to be some anger and rage about all things "Foreigner" give us back our beaches, our land, our sun......you realize that without foreign investment you'd be a fishing nation? At least Jamaica has Baixite and Ciba has Sugarcane.....these are Natural resources and a country needs more than tourism to survive......stop raging and threatening to deport foreigners.....I' not a fan of Sarkis' leadership, but for a government official to state that deportation is on the table.....seriously, are you in high school or do you represent the position of a sovereign nation?


Sign in to comment