Tuesday, November 3, 2015
By NEIL HARTNELL
Tribune Business
Editor
nhartnell@tribunemedia.net
A former Baha Mar director yesterday suggested that Sarkis Izmirlian will “rise up and go again”, but not in the Bahamas with its “sullied” investment reputation as a result of the project’s demise.
Dionisio D’Aguilar suggested that Mr Izmirlian “could write a book” on where the Government went wrong in its handling of the Baha Mar dispute, after its Chinese contractor’s failure to complete on time, and on budget, sparked a financial crisis for the developer.
Mr Izmirlian, via his BMD Holdings vehicle, yesterday issued own statement that described the China Export-Import Bank’s takeover of the Baha Mar project as the latest in a series “of disastrous actions” taken by the Chinese and Christie administration since the June 29 filing for Chapter 11 bankruptcy protection.
Mr Izmirlian said the bank’s successful appointment of Deloitte & Touche as the project’s receivers, which was ratified by the Supreme Court, was “destroying any hope” that the original vision for Baha Mar could be realised.
He suggested that the “widespread collateral damage to hundreds of businesses”, and termination of 2,000 Baha Mar employees, could have been avoided had the Government and the Chinese not successfully opposed plans to restructure the development via Chapter 11 procedures.
Mr D’Aguilar, meanwhile, a friend of Mr Izmirlian as well as ex-Baha Mar director, said the China Export-Import Bank’s receivership would likely not have surprised the developer.
“I’m sure Mr Izmirlian knew exactly where these negotiations were going,” Mr D’Aguilar told Tribune Business. “He knew this was imminent if he was not prepared to make an agreement on their [the bank’s] terms.”
He acknowledged that the Izmirlian family’s purported $850-$900 million equity investment in Baha Mar was now at risk, and added: “It’s a blow to lose that amount of money, but life goes on.
“He tried, he failed, but this will not kill him. He’ll rise up to go again, but not here.”
Mr Izmirlian and his father, Dikran, still retain a vast fortune as a result of the latter’s control of the world’s peanut supply. They have used the wealth generated from that venture to expand into a diverse range of investment holdings, including real estate and property, and have the ability - as billionaires - to eventually put the Baha Mar debacle behind them.
“This project has left a bad taste in a lot of people’s mouths,” Mr D’Aguilar added. “The failure of this project has clearly sullied the Bahamas’ investment reputation, no doubt about it.
“You hear it all the time: People were looking at the Bahamas, and this caused a lot of them to pause. They [the Government] stopped, reviewed and cancelled. They will have a lot to do to rebuild the image that we’re positive and investor friendly.
“The Government will argue probably that they did nothing wrong. I’m sure Sarkis could write a book on where they went wrong,” he said.
“But this is business. This is for the big boys. This is what happens when you go into business. We’ll see where it goes.”
Mr Izmirlian, in his statement yesterday, said: “The appointment of a receiver by the Export-Import Bank of China continues the unfortunate pattern of disastrous actions taken by other stakeholders since Baha Mar has filed for Chapter 11, [which] have moved Baha Mar further from completion and are now destroying any hope that Baha Mar, as originally conceived for the Bahamas, can become a reality”
Mr Izmirlian reiterated his belief that the root cause of Baha Mar’s woes was the failure of the project contractor, China Construction (America), to complete the $3.5 billion development on time and on budget.
Accusing it of “reckless and self-serving actions at the expense of the project”,Mr Izmirlian also slammed the Christie administration for contributing to Baha Mar’s “liquidity crunch” by withholding the $21 million-plus owed over the West Bay Street re-routing.
This resulted in the Chapter 11 filing, which would have ensured Mr Izmirlian remained in control - something that could not happen under Bahamian law.
“Under Chapter 11, Baha Mar’s assets would have been protected; we would have had the opportunity in a prudent manner to try to resolve the issues between the parties; we put forward a plan to pay all valid Bahamian claims in full; we were able to continue to pay the salaries of the more than 2,000 Baha Mar employees; and any downsized employees would have received severance, which sadly they will now not receive,” Mr Izmirlian said.
“However, the Government of the Bahamas, in concert with China Construction (America) and CEXIM, undertook a campaign that resulted in the Chapter 11 being dismissed. The effect of this effort by the Government of the Bahamas, China Construction America and CEXIM now leaves Baha Mar in the position where CEXIM bank is now the owner of Baha Mar; most of its employees have been laid off; widespread collateral damage to hundreds of businesses; and its assets are being further impaired.”
Mr Izmirlian added that the receivers’ appointment would not “serve the best interests” of any party to the dispute or the Bahamian people, as he accused the Chinese and the Government of being “more focused on legal and political manoeveres than solutions”.
Allyson Maynard-Gibson, the attorney general, last week disputed Mr Izmirlian’s assertions that continuing the Chapter 11 process could have avoided employee lay-offs and resulted in a faster project opening.
“On July 10, Baha Mar told the Bankruptcy Court that in the absence of an agreement ‘in the near term’ with the Export-Import Bank, Baha Mar would ‘be compelled to immediately downsize their operations to a minimum over approximately 45 to 60 days, which includes . . . reducing their work force to a skeletal staff . . ..’,” Mrs Maynard-Gibson said.
“According to a July 10 affidavit submitted by Baha Mar’s president, the ‘skeletal staff’ would have comprised only 52 employees, plus an additional 47 employees ‘to assist with the wind-down of their respective operations . . . notwithstanding their impending termination.’”
She branded Baha Mar’s Chapter 11 restructuring plan as “entirely hypothetical, and it offered no hope of avoiding workforce reductions. The plan hinged entirely on the availability of at least $400 million to $600 million of ‘exit financing’, for which Baha Mar management did not purport to have any commitment from anyone.”
Comments
sealice says...
THE LIGHTS STILL ON OUT THERE?
Posted 3 November 2015, 1:45 p.m. Suggest removal
TalRussell says...
Comrade of course the lights are still burning but no thanks to the stewardship of Izmirlian or former "Wash em, Dry em, Press em" Director Dionisio and still his most loyal take to da media sidekick.
Yes, the lights still on but now we also have to talk about the many hundreds financially distressed home owners/renters and businesses, that had to have their lights disconnected - all to subsidize for making it possible for BEC to keep da lights on at Cable Beach?
Talk about corporate socialism - gone all crazy.
Posted 3 November 2015, 2:02 p.m. Suggest removal
jackflash says...
QUESTION?
Are there lights on the dock?
Posted 3 November 2015, 2:51 p.m. Suggest removal
jackflash says...
QUESTION?
Are there lights on that dock?
Posted 3 November 2015, 2:53 p.m. Suggest removal
birdiestrachan says...
Mr: Ismirlian will do well to write a book as to where he went wrong and D'Aguilar will be the co-author. There is to much dishonest in this Country. Mr: Ismirlian is not without fault and Mr: D"Aguilar knows that. So he plays the blame game. where is his responsibility in bitting off more than he could chew and not counting the cost? Mistakes were made for sure.
At this point there should be a whole lot of "Mea- Culpa: and beating of the Chest. How about some sack clothes and ashes I am sorry for him . but there is no need for the blame game and stone throwing.
Posted 3 November 2015, 1:58 p.m. Suggest removal
Franklyn says...
again Mr D’Aguilar is out of the loop, and would do well the pack up and forward on with the Izmirlians who will “rise up and go again”, but not in the Bahamas with its “sullied” investment reputation. And yes Mr. D'Aguilar, "as billionaires" the Izmirlians should pay their out-standings with Bahamas Contractors. The Izmirlians gave no regard to Bahamian Contractors who are owed millions for work completed on his project when they went through Chapter 11 filing ...and agreeing to additional work by Bahamian Contractor who went out - bought supplies and equipment - not knowing that the next day these same people were filing for Chapter 11.
You believe so much in the integrity and good will of these guys Dionisio, please have them pay their outstanding to Bahamians before sailing away with their "Billions"
Posted 3 November 2015, 2:38 p.m. Suggest removal
MonkeeDoo says...
I believe that the CEXIM Bank is the owner of the project now, as it holds the majority equity shares. CCA also has some interest so these are the people that have to find the money to pay the people. Its like you people don't know the difference between a person and a Company. I also heard that CCA hired the Bahamian Subs, so we need to find out from the Bahamian Subs, who they agreed to work for and who / what agreed to pay them. Then they need to get a lawyer. CEXIM Bank will not be able to say it doesn't have the money to finish the hotel and if it has the money for that, it has the money for the Bahamians. They must be putting up the money for the Pointe too.
Posted 3 November 2015, 3:49 p.m. Suggest removal
Stapedius says...
Whether D'aguilar believes in Sarkis' ability to 're-invent or not is nobody's business. As a director and a friend I guess he's all yo happy to jump to support Izmirilian. This is his right. But, what annoys me with this guy is that he never once appears to be in support of the affected Bahamian. He mentions the impact to the worker as a sideline, but his overarching commentary always appears to be in support of Izmirilian. Well I have a few questions old boy. Why weren't you asking Izmirilian, well what the F? When they snap and snook the bankruptcy. Why didn't you advise him better with the regards to the way his actions would be perceived? Instead of being a commentator with only criticism of the government why didn't you ask them why Bahamian construction crews weren't being paid? The Bahamian companies being paid had nothing to do with the poor work of the Chinese. So why doesn't D'aguilar ask that? I will say it again, all of them are to blame. The Chinese, the developer and our government all carry some blame. This stupid attitude by Sarkis that he is blameless is sickening. To see D'aguilar prostrate himself is equally sickening.
Posted 3 November 2015, 4:44 p.m. Suggest removal
truetruebahamian says...
This government sickens me. We support a new and productive Sarkis initiative.
Posted 3 November 2015, 6:48 p.m. Suggest removal
Baha10 says...
Izfailian was the Developer and the Cuban/Bahamain D'agulair his trusted advisor, but neither had a clue and this is the end result, no one to blame but themselves, and everyone else simply left to absorb finanacial loses and reputational damage as they drift off back to the foreign lands from where they both came.
Posted 3 November 2015, 7:28 p.m. Suggest removal
Economist says...
The government should have stayed out of this.
No matter how you look at this project has failed.
Maybe it was the developer.
Maybe it was the Exim bank.
But every potential investor will think twice because MAYBE IT WAS THE GOVERNMENT.
This has stopped inbound investment. It spells economic disaster for The Bahamas.
Posted 3 November 2015, 7:48 p.m. Suggest removal
Entrepreneur says...
Economist makes a valid point.
I believe there was a conspiracy to injure Sarkis by certain groups so that they could gain control. And now as of August 2016 they have largely succeeded.
Posted 26 August 2016, 1:21 a.m. Suggest removal
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