Nassau, Bahamas — The Bahamian delegation in Beijing, China, participating in talks geared at reaching a resolution in the Baha Mar debacle, extended its stay on Tuesday to attend a final meeting geared at brokering a last-ditch deal with the development company, its contractor and its lender.
After the second day of meetings on Monday, no deal had been reached.
Baha Mar CEO Sarkis Izmirlian is not attending the meetings. The company is again being represented by president Thomas Dunlap, its US attorneys, and representatives from Baha Mar’s investment bank.
Attorney General Allyson Maynard-Gibson is again leading the Bahamian government delegation. This is the second round of talks in two weeks.
The parties re-entered talks around 9 am on Tuesday, hours after Baha Mar and China Construction America (CCA) exchanged strong statements, blaming each other for the failure to reach an agreement to get the Cable Beach project completed and operational.
In a blistering statement against CCA, Baha Mar branded CCA’s offer to invest in the stalled $3.5 billion project a “sham”.
Baha Mar also hit out at CCA’s track record and accused it of developing a “sad pattern of failing to perform properly at Baha Mar and other important projects in The Bahamas”.
Baha Mar was responding to CCA’s proposal to invest $100 million and provide a guarantee of $175 million to the Export-Import Bank of China (CEXIM Bank) in connection to the bank’s new $200 million loan facility to Baha Mar Limited (BML).
In a statement on Sunday, CCA said it asked BML to provide a similar guarantee. However, the release notes that Izmirlian rejected CCA’s request for a counter guarantee.
In its statement, Baha Mar explained why it did so.
“CCA in its release cites not a viable proposal on its part but rather a distortion of an old posture that made discussions to negotiate a consensual resolution with it as one of the parties a sham,” Baha Mar said.
“It is why we came forward and made our very viable proposal directly to the Export-Import Bank of China.”
The proposal that Baha Mar referred to calls for CEXIM Bank to match the resort developer’s pledged $200 million.
Izmirlian requested 50/50 financing for a $400 million new senior facility to fund the “completion, opening and stabilization” of the resort.
However, CCA has stated that it has a binding contract in place with Baha Mar.
“It is interesting that when a very viable proposal is put forward by Baha Mar Ltd to the Export-Import Bank of China, a proposal which provides for a significant equity infusion by the Izmirlian family to complete and open Baha Mar and would utilize Bahamian contractors and a Bahamian workforce to properly finish the work at Baha Mar that CCA failed to do, CCA issues a highly defensive and apparently panicky press release,” Baha Mar said.
“CCA should be concerned. No matter how CCA tries to spin it and no matter how often it tries to deflect from its lack of responsibility, it cannot cover up the sad pattern of its failing to perform properly at Baha Mar and other important projects in The Bahamas as well.
“…CCA failed to complete Baha Mar repeatedly on the timetables it set, its work has been called into question, it walked off the job, its failure to perform caused Baha Mar to have to seek Chapter 11 protection and it has been uncooperative in working toward a consensual resolution.”
In its statement, CCA claimed that Baha Mar is responsible for its own downfall.
“BML is bankrupt because it repeatedly made mistakes in the development of Baha Mar,” said the statement.
“Their attempts to place blame on CCA Bahamas are self-serving explanations to deflect attention from their own negligence and mismanagement of the resort’s development. However, despite their serial missteps and purposeful avoidance of its contractual payment obligations, we are once again offering to provide financial assistance to help save Baha Mar and create thousands of jobs for the Bahamian people.”
Baha Mar filed for bankruptcy protection on June 29 in the United States.
Since then the developer and contractor have passed the blame around.
In the letter to CEXIM Bank, Izmirlian indicated that he wanted to rid himself of CCA.
He said his aim is to deploy a share of that financing to hire Bahamian contractors to step up and complete CCA’s work on the resort, though Baha Mar remained in negotiations for Chinese general contractors “to assist if needed”.
As Baha Mar seeks the additional capital, it is also facing other challenges.
The government filed a winding up petition that would place the fate of the development into the hands of a liquidator.
Supreme Court Justice Ian Winder will hear the winding up petition on July 31.