Deputy Prime Minister Chester Cooper. Photo: Donavan McIntosh/Tribune Staff
By YOURI KEMP
Tribune Business Reporter
The deputy prime minister yesterday sought to reassure Bahamians that the Grand Lucayan sale remains on track by confirming the prospective buyer is still conducting "investigations" into all aspects of the purchase.
Chester Cooper, also minister for tourism, investments and aviation, said ahead of the weekly Cabinet meeting that he was unable to say much about the sale because the resort is still “under contract" with Electra America Hospitality Group. However, he added that the latest seven-day extension granted to the buyer to complete its "due diligence" was no cause for alarm.
"This is what we call the due diligence period. During the due diligence period, the buyer would go and do studies and investigations, ask questions, and come back and seek to negotiate based on the information they find in the results of their studies, etc," he added. That due diligence period ends on Thursday, and Mr Cooper said he will be able to give more details at that point.
The deputy prime minister appeared to be responding to former Grand Lucayan chairman, Michael Scott KC, who in this newspaper on Tuesday urged the Davis administration to “come clean” with the Bahamian people over its efforts to sell the resort after granting a third extension to Electra America's due diligence time.
He told Tribune Business “the boot is on the other foot” after he, the Board that he chaired and the former Minnis administration had to face “scathing criticism” from members of the now-current government over both the Grand Lucayan’s September 2018 purchase and subsequent failed efforts to sell the property to the ITM Group/Royal Caribbean consortium.
Speaking after the present Grand Lucayan Board late on Thursday night confirmed that Electra America Hospitality Group had been granted another seven-day due diligence period extension, taking both sides to a new Thursday deadline fort the buyer to pay the required $5m deposit, Mr Scott would not be drawn on whether he thought the proposed sale was in trouble.
However, he reiterated his belief that no potential Grand Lucayan purchaser - Electra or otherwise - would close a deal without an “ironclad, bullet-proof assurance” that the Government will redevelop Grand Bahama International Airport in accordance with the standard and timeline required to facilitate a return on hundreds of millions of dollars in investment.
Given that the purchase was unveiled during May’s second week, the originally-announced 60-day due diligence period was due to expire in mid-July. That was extended to early August, and then another 45-day extension was announced until September 15. Last week’s was the third granted to Electra, as both sides seek to turn their Memorandum of Understanding (MoU) into a binding sales agreement with a $5m deposit paid.
Several sources said the short seven-day nature of the latest extension indicates Electra’s Grand Lucayan has reached the crunch stage, or decision time, where both sides have to determine if they can reach an agreement and the sale will proceed or if they will walk away. The Lucayan Renewal Holdings media statement indicates that the issues lie on the buyer’s side.
The Grand Lucayan sale, and reconstruction of Grand Bahama International Airport (GBIA), go hand in hand as there is little value in the resort if the island cannot provide sufficient airlift access. Mr Cooper yesterday said the Government had narrowed the candidates to redevelop the airport via a public-private partnership (PPP) deal from three to two.
“We have two prospective participants. At the moment, we have narrowed down the list of potential developers to two. They’re credible, they're funded and as you know, we put in place a new Board in Freeport - the Freeport Airport Development Board (FADB)," the deputy prime minister added. "They are looking at the possibility of entering a PPP to design, build, finance and manage the GBIA.
"There is a design phase. It takes a long time to build an airport. In the meantime, we are doing preliminary repairs. We're cleaning up the airport. We’ve have demolished one of the hangars that's been an eyesore since Dorian, we're repairing the other one.
"We're repairing the domestic terminal to welcome Sunwing out of Toronto and Montreal, and Bahamasair out of Raleigh, North Carolina. So we’ve got to make sure that we give the guests who are arriving a good experience on arrival. So we continue to make the preliminary updates as best we can.
“We've done the RFP (Request for Proposals) process for the Grand Bahama International Airport as a priority. We've done the RFP process… for the Grand Lucayan resort. We have been very busy and very engaged in terms of advancing our country, particularly in the area of tourism investments.”