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Receivers Deny Fosun Is Baha Mar’S Buyer

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Baha Mar’s receivers yesterday denied that the Chinese-based Fosun Group had been selected as the preferred bidder for the $3.5 billion project.

Raymond Winder, Deloitte& Touche (Bahamas) managing partner and one of the three-strong receiver team, told Tribune Business that while Fosun was “part of the process” - indicating it was one of the bidders, or had at least conducted due diligence - it was not Baha Mar’s potential purchaser.

This contradicts multiple Tribune Business sources who have identified Fosun, the Club Med and Cirque de Soleil owner, as the likely Baha Mar buyer.

They have suggested that the purchase is largely “done”, and is subject just to the China Export-Import Bank and China Construction America (CCA) completing the $3.5 billion development’s construction.

“I think they are almost certainly the buyer,” one contact said of Fosun. “I don’t think there are many runners. At the end of the day, it’s almost certainly a Chinese deal.”

Fosun was also among the Government’s favoured options for a Baha Mar purchaser, but its interest was derailed - at least temporarily - when its chief executive was called in for questioning amid a major corruption probe in China. No charges were ever said to have been levelled against him or the group.

Prime Minister Perry Christie’s description of the Baha Mar buyer during his recent visit to London also appears to fit a conglomerate such as Fosun.

“We were informed as to the company itself. It is obviously multi-faceted in every which way; it’s a conglomerate,” Mr Christie said from London,

“We are unable to speak at this stage as to who they are because, again, negotiations are taking place in Beijing and in Hong Kong and, for that matter, elsewhere with respect to an agreement being arrived at.”

Many observers have privately stated their belief that Baha Mar is being reserved for a Chinese buyer such as the Fosun Group, given the China Export-Import Bank’s ‘impossible demand’ that it recover its full $2.45 billion outlay on the project.

A Chinese buyer, though, would be able to agree a deal where in return for making the China Export-Import Bank ‘whole’, it is paid back later via a series of ‘soft’ loans and other concessions.

“It’s a Chinese deal where the China Export-Import Bank won’t be writing off a large loss in the Bahamas. It will look OK,” the source said.

“The China Export-Import Bank won’t be seen to take a loss on this. It will simply give the buyer a discount elsewhere, and take the loss there.”

Comments

banker 1 year ago

Interesting. Several things pop up here. First of all, Fosun has made a substantial investment in ClubMed among others. From my Bloomberg screen:

Qian Jiannong is Vice President, Fosun Group, President of Fosun Tourism & Commercial Group, Co-President, China Momentum Fund. He is now the board director of Club Med(France) , Folli Follie (Greece) and Osborne(Spain). He achieved notable global investment success in Club Med, Folli Follie, Vigor, Atlantis, Secret Recipe, Osborne, China CITIS and Thomas Cook.

Fosun has noted in their 2016 Interim report that Chinese tourism abroad has now surpassed 100 million and most of them go to fixed places like Hong Kong, Vietnam, etc. France and Germany are the only non-Asian countries. Fosun states that they want to break the status quo.

In spite of their investments in travel, their big play is insurance and wealth management. They bought Nagico, a big insurance player in the Caribbean and a German bank for wealth management (within the OECD, FATCA rules framework).

Reading through their financial reports (publicly traded on the Hong Kong exchange), they are down a bit in terms of revenue, expected ROI on investment etc. In spite of a smoke test that they may be interested in Baha Mar, it really doesn't seem to fit their profile. Fosun is heavily into data-driven analytics (they started as a tech company in marketing analytics) and they have a penchant for buying brand names. There are no brand name tenants at Baha Mar and the well is poisoned. They have about 6 hotels under development and none of them have returned significant ROI. Their big play was bringing ClubMed to China.

Whatever their status, I do not believe that a buyer is secure for Baha Mar. I do believe that there may be an MOU stipulating a possible sale upon completion, but I do not believe that it is a done deal. I don't think that there is a committed buyer in the wings. If I had to guess, I would put Fosun's chances at no more than 50% probability that they are interested in buying Baha Mar.

I honestly don't think that anyone is firmly committed in line to buy Baha Mar.

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