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EDITORIAL: Double blow to economic hopes

WHILE all eyes have been on the storm rolling towards Grand Bahama and Abaco this week – understandably given the destruction those islands experienced in Hurricane Dorian – there has also been economic turbulence to keep a watch on.

As the government shifted into emergency mode yesterday to deal with the tropical storm Nicole as it blooms toward hurricane status, a press release emerged announcing the end of the deal for the Grand Lucayan property.

On a day when the storm would dominate the news, the press release bizarrely left the announcement of the end of the deal until the fourth paragraph.

Instead, it started by claiming: “The Board of Lucayan Renewal Holdings Limited continues to work towards successfully closing the sale of the Grand Lucayan Resort to secure the best outcome for Grand Bahama and the Bahamian people.”

Successfully is a remarkable word to use in the press release announcing the failure of the deal that was on the table.

It then goes on to spell out that the buyers, Electra America Hospitality Ltd, had trouble securing financing at appropriate terms – with Electra pointing towards “shifting global capital markets and related inflationary pressures”.

Back in May, when the deal was done, Deputy Prime Minister Chester Cooper said: “We truly believe Electra will be good for Grand Bahama. Today is the beginning of the renaissance and rebirth of Grand Bahama island.”

Touting the PLP’s election slogan, he added: “This is truly a new day for Grand Bahama.”

He also took the time to lambast the previous administration led by Dr Hubert Minnis, claiming there was a series of mistakes by the FNM government.

He added: “We sought a buyer for the Grand Lucayan that was well resourced, well intentioned, desired to become a strong community partner, a vision for the resort, and a willing partner in the shared vision for the growth of Grand Bahama.

“With this sale, to a solid committed partner we will recoup a significant portion of the investment to people’s money and put Grand Bahama on track to once again be the vibrant entertainment capital of The Bahamas.”

But speed bumps soon began to develop, it seemed. Due diligence was taking longer than expected. Deadlines got extended. And now, on the eve of a storm, the deal is off.

There are also questions left unresolved – one of the things touted at the sale announcement was a $5m deposit being paid by the buyer – but in September the Grand Lucayan’s chairman was tight-lipped about whether a sales contract had been signed and a deposit paid, and the latest press statement left us no clearer as to whether the nation was $5m richer or poorer.

Two successive administrations have now tried and failed to find a new owner for the property, and having blasted the FNM for putting money into keeping the property going, the PLP will now face a tricky decision over whether to invest in upkeep for the property while it tries to find a replacement buyer.

This is a bitter blow for the government – but more than that it is a blow for Grand Bahama, where residents might have hoped the reopening could have re-energised the economy.

A second blow has also come in the shape of the shock news of cryptocurrency business FTX being insolvent and potentially being bought up by a rival.

In April, Prime Minister Philip “Brave” Davis, at the groundbreaking for FTX’s headquarters in Nassau, had said the development was expected to bring 400 jobs.

The success of FTX would have been a strong card in The Bahamas’ bid to attract further digital businesses.

The apparent failure of FTX is not the fault of the government – but it is a blow to efforts to bring in other similar businesses. We cannot point to them and say look, they are thriving here, so can you.

More directly, there will be worries over what will happen to those working at FTX. It is far from unclear whether the potential buyer will want to continue to operate out of The Bahamas, and it must be a worrying time for employees.

Two pieces of bad news, all as Nicole marches on towards Abaco and Grand Bahama. Stay safe, and let’s hope that the storm doesn’t make the news any worse.

Comments

LastManStanding 3 weeks, 2 days ago

Government shouldn't be in the business of buying hotels. Arguably one of the dumbest moves made by the Minnis administration.

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Maximilianotto 3 weeks, 2 days ago

In every normal country the minister responsible for the Our Lucaya disaster would resign. „Vetting Exumas $1,2 bn investors. Who’s vetting him?

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sheeprunner12 3 weeks, 1 day ago

Please do not expect 242 politicians to resign out of honour ......... their honour is as shallow as their words and promises to the Bahamian citizens.

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Maximilianotto 3 weeks, 2 days ago

FTX will close. SEC investigation ongoing so toxic investment. Negative value. Binance also on SEC radar so walked away. Maybe government should buy? Competence of Minister for Investment shouldn’t be of any doubt. Then merge with Aragonite into Sovereign Wealth Fund. Rothschild will advise and Kristalina will congratulate Brave. Sand everywhere.

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birdiestrachan 3 weeks, 1 day ago

Mr Davis did say investors are not interested in GB , the present government asked the former not to buy the hotel Hutchinson tired selling it they were unable to do so, some say it is due to lack of an airport , but it goes deeper than that , there are so many hurricanes due to constant dredging , they may be able to sell the two small proportion But the wave?.

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realfreethinker 3 weeks, 1 day ago

We sought a buyer for the Grand Lucayan that was well resourced, well intentioned, desired to become a strong community partner, a vision for the resort, and a willing partner in the shared vision for the growth of Grand Bahama. If they were well resourced how come they are saying that monies are not available to borrow? Someone is lieing.

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birdiestrachan 3 weeks, 1 day ago

The situation could have changed

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