By YOURI KEMP
Tribune Business Reporter
A Cabinet minister yesterday said Dorian-related insurance claims will ensure the government receives the full $65m Grand Lucayan purchase price, adding: “Now is time to invest in Grand Bahama.”
Kwasi Thompson, minister of state for Grand Bahama, explained: “The chairman (Michael Scott) and the minister (for tourism and aviation, Dionisio D’Aguilar) were quite clear in terms of the government is going to receive in total the $65m.
“The $50m is the amount which is credited, or takes into the account the credit, as a result of the damage from the hurricane. As we indicated, we wanted $65m. The hurricane took place during the time of negotiation.
“The hotel was damaged during that time so we did take into account that damage. What’s also important is that the insurance will be kept by the government, and we anticipate that those insurance proceeds will total the $65m that will be received by the government.”
The $65m purchase price to be paid by the ITM Group/Royal Caribbean joint venture was a key objective for the government, particularly when it came to countering critics of its decision to buy the Grand Lucayan in September 2018, as it matches the sum paid to Hutchison Whampoa for the property.
All existing Grand Lucayan staff will be made redundant, and receive due severance pay and benefits, prior to the ITM/Royal Caribbean takeover in line with standard practice for such acquisitions.
Mr Thompson, meanwhile, described the signing of the Heads of Agreement and sales agreement for the hotel as “a significant achievement”. He added that the Minnis administration “purchased he hotel in order to sell the hotel, but this deal was far more than just a purchase and sale of a hotel. This really was about creating a new destination for Grand Bahama, and that really was the overall vision.
“Yesterday was a very, very good day,” Mr Thompson continued. “The Government signed the Heads of Agreement along with the Bahamas Investment Port Group, which is a group made up of ITM and Royal Caribbean. We also signed the purchase and sales agreement, which was an agreement between the government and the same group to purchase the Grand Lucayan.”
Describing the Grand Lucayan sale as an “exit strategy”, Mr Thompson said the plan was to “purchase and sell it to someone who was a significant developer. We believe we have been able to achieve that”.
He added: “What is also important from Monday is that we have two significant investors, Royal Caribbean who has done major work in The Bahamas, and ITM, which has a number of cruise ports and they really have shown a significant degree of investor confidence in Grand Bahama.
“We hope that the trend continues in terms of the investor confidence, because we really believe that now is the time to invest in Grand Bahama.”
Mr D’Aguilar said yesterday: “I’m optimistic about Grand Bahama. We are signing this deal with Royal Caribbean and the ITM Group. It is going to bring 2.5m foreign visitors to Grand Bahama. You add that to the 1m that the Carnival transaction is going to bring to Grand Bahama, right now they have 600,000-plus foreign visitors there, so that’s 3.5m extra cruise passengers.
“You have a vision for the hotel. The hotel is going to get a new owner, going to bring about substantial investment, going to bring the more attractive stopover visitors to the destination. There is hope. There is optimism. We have a plan.”
“Over the next couple of years as the construction of these projects get underway and, ultimately, at the end of the day when they become operationalised and they start to employ Bahamians and start to create opportunities for business and entrepreneurs in Grand Bahama, there is a way forward. I see a vision. I see a plan. I am optimistic.”