The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Chamber of Commerce’s chief executive warned yesterday that the Baha Mar agreement’s “credibility and validity” will be undermined if creditors fail to receive outstanding monies by the dates the Government has promised.

Edison Sumner told Tribune Business that “the test” of the Christie administration’s deal with the China Export-Import Bank would be when Bahamian creditors received payment.

While welcoming the agreement’s announcement at ‘face value’, Mr Sumner warned that missing the payment deadlines would likely shred confidence and cause further “frustration” for unpaid contractors, vendors and former Baha Mar staff.

“We’re hoping for the Government’s sake, and the sake of the creditors, that these payments are made within the timelines presented,” Mr Sumner told Tribune Business.

“The Government has to follow through on the payments and make sure the payments are made in the timeframe announced by the Prime Minister.

“If you’re saying that former [Baha Mar] employees will be paid by the end of September and nothing happens, that’s going to undermine anyone’s credibility,” the Chamber chief executive added.

“And if you’re saying that the contractors and vendors will all be paid by the end of December and nothing happens, that creates further issues and challenges the credibility and validity of the announcement made.”

The Government, in announcing the creation of a five-person committee to oversee the payout of Baha Mar creditor claims, said it “hopes” that employees would receive outstanding monies “no later” than September 30.

And all other Bahamian creditors, including vendors and the contractors owed a collective $74 million, should receive their monies “no later” than December 31, 2016.

Still, Mr Sumner reiterated: “The test of this is not going to be in the announcement. That has passed. The proof in the pudding will be when the funds are actually paid.

“Fingers crossed, we hope it happens. I don’t think these folks [Bahamian creditors] can take any more delays, any more frustrations, and one of the frustrations will be saying they will be paid by a certain date and it doesn’t happen. That will really mess some people up.”

Mr Sumner said the Prime Minister’s announcement of the Baha Mar agreement’s general terms had created a renewed sense of hope in many former employes and creditors, most of whom had long written-off recovering anything they were owed by the project.

Warning that this should not be undermined or squandered, the Chamber chief added: “It has certainly brought a new level of hope and optimism to those creditors owed money from the Baha Mar project.

“While the announcement was welcome news and positive, many of those owed money will not be satisfied until they see the monies deposited to their accounts, and the cheques written and issued.

“We can talk about payments, schedules and timelines all day long. Until we see monies paid to these companies, it will be a work in progress. That’s why we’re hoping the Government is able to follow through with this committee to make these payments happen.”

Tribune Business revealed on Wednesday how the China Export-Import Bank, the project’s $2.45 billion secured creditor, is making available “about $100 million” to settle Bahamian creditor claims over Baha Mar.

This newspaper was informed that the payment process was unlikely to be “messy” or complicated, given that a list of unsecured creditors - and their claims - had already been presented to the Supreme Court by Baha Mar’s receivers and provisional liquidators.

As a result, the five-strong committee’s task will be to validate those claims and determine the best method of payment.

It was also confirmed to Tribune Business that unsecured creditors owed $500,000 or less, meaning the 2,000-plus terminated Baha Mar staff and small and medium-sized Bahamian businesses, would likely be ‘made whole’ and paid out first.

Those with larger claims, such as some of the bigger Bahamian contractors, will probably have to “negotiate” their payouts to some extent, meaning they may not get ‘100 cents on the dollar’.

However, this newspaper was told they were likely to “fare quite well”, and recover more than 50 per cent of what they were owed, which was the benchmark suggested by PLP MP, Leslie Miller.

Describing the $74 million owed to Bahamian contractors alone as “a significant sum”, Mr Sumner said its payment and ultimate release into the Bahamian economy would create “a significant impact in the short-term” for numerous firms and their employees.

He added that the payments to former Baha Mar staff would be made at an important time, coinciding with the ‘Back to School’ period, and would also help them to settle outstanding bills, such as rent and mortgages.

Emphasising that the Chamber’s concerns were on the execution/delivery of the Baha Mar agreement’s terms, not its sincerity, Mr Sumner said: “We believe there’s substance to it.

“We believe the Government made this announcement being sure that all these outstanding debts owed to vendors, contractors, retailers and creditors were going to be paid.”