The Tribune

The deputy prime minister yesterday clarified that, while details are still being worked out, the Government plans to offer equity ownership in Royal Caribbean’s Paradise Island project to Bahamian investors.

Chester Cooper, also minister of tourism, aviation and investments, in an e-mail sent to this newspaper said: “It is still the intention of the Government to offer shares in the Fund to Bahamian investors. The mechanism and details will be rolled out in due course. Ultimately, 49 percent will be held by Bahamians - the Government and Bahamian investors.”

His statement sought to clarify the Government’s position after Prime Minister Philip Davis KC, speaking at the Heads of Agreement signing for the cruise line’s latest $165m Bahamian destination, seemed to suggest the minority 49 percent equity stake in the Royal Beach Club would now be held by the Government through the National Investment Fund.

That Fund was legislated, and made law, in 2022 to replace the previous Sovereign Wealth Fund Act. Confirming that PDI Paradise Ltd, a Royal Caribbean subsidiary, will own the majority 51 percent equity interest, Mr Davis said: “This project is a partnership between the Bahamian government, the Bahamian people and Royal Caribbean Cruise Lines.

“And that partnership is 51 percent Royal Caribbean Cruise Lines and 49 percent Bahamian government. A new vehicle has been formed, the National Investment Fund, and that will own the business. So we have equity ownership in the business and all of the amenities that will be offered will be Bahamian-owned.”

That seemed to suggest a departure from the initial plan. The latter would see the Government’s equity stake in the project based on the value of the four Crown Land acres it is contributing to the 17-acre Royal Beach Club located on the western end of Paradise Island in the vicinity of Colonial Beach.

Once that land was appraised, and its value calculated, the balance of the 49 percent Bahamian equity stake is to come from an initial public offering (IPO) of shares to Bahamian investors. The structure is thought likely to mirror that of the Nassau Cruise Port, where an investment fund was created to hold the collective 49 percent Bahamian interest in that project, and shares in the fund issued to local investors.

Mr Cooper’s statement yesterday signals that the IPO plan has not been abandoned, and it appears that the National Investment Fund will be the vehicle to issue/offer shares to investors. Neither the Prime Minister’s Office nor Royal Caribbean responded to Tribune Business requests for comment yesterday.

Mr Davis had also referred to the Fund in his remarks at the Heads of Agreement signing with Royal Caribbean, stating: “It is anticipated that PDI Paradise Ltd will hold at least 51 percent of the shares in the Royal Beach Club, with the remaining shares being allocated to the National Investment Fund for the benefit of the Bahamian people.” PDI Paradise Island is a Royal Caribbean vehicle

Mr Cooper also said 1 percent of the Royal Beach Club’s revenues will be placed in the Tourism Development Fund. Combined with the 49 percent ownership stake, he added that this means Bahamians will receive 50 percent of the project’s revenue.

“The Government through the National Investment Fund will hold equity, ensuring that 49 percent of this endeavour is owned by Bahamians,” Mr Cooper said. “One of the highlights I wish to share is that 1 percent of gross revenue derived from this establishment will go towards the Tourism Development Fund.

“The Tourism Development Fund is an offshoot of the Tourism Development Corporation, designed specifically for empowering Bahamians in tourism-related entities. And let me put this 1 percent in perspective.

“If Bahamians own 49 percent of this venture, and if we’re getting 1 percent of gross revenues, in the final analysis, we will be getting more than 50 percent of the earnings from this investment here. And I would only say that today after the documents have all been signed, sealed and delivered.”

The Royal Beach Club is forecast to generate 200 direct jobs, and the Prime Minister said: “Local businesses will see their share of opportunities as well. There will be Bahamian boutiques creating avenues for small business ownership.

“And I am pleased to announce that this project also encompasses a joint venture with a Bahamian-owned entity for the operation of a water taxi business. This venture will provide transportation options for guests of the Royal Beach Club, as well as other attractions in Nassau Harbour, enhancing accessibility while creating additional avenues for economic growth within our community.

“Ultimately, this project will largely be run by Bahamians, owned by the Bahamian people and supported by Bahamian businesses. When we talk about the need to ensure that major tourism projects are primarily for the benefit of the Bahamian people, these are the kinds of opportunities that we are talking about.”

Mr Davis, meanwhile, also dismissed fears that Royal Caribbean’s beach club will suck passengers away from Bay Street businesses and Bahamian tours, maintaining he is “not concerned about any loss of business in any other side of the town” as there will be “sufficient” visitors for all.

He added that there are not enough attractions for visitors to enjoy, and the Royal Beach Club will enhance the activities available to guests and entice more of them to leave their ships.