Tuesday, December 5, 2017
By NEIL HARTNELL
Tribune Business Editor
BAHA Mar's sale to Chow Tai Fook Enterprises (CTFE) was completed by the December 1 closing deadline, Tribune Business has been informed.
The $4.2 billion project's purchase from the China Export-Import Bank was confirmed by sources close to the situation, although Baha Mar officials could not be reached for comment. This newspaper understands that a press statement confirming the deal's closure was supposed to be issued, but nothing was received before press time last night.
Meeting the December 1 deadline was critical, as failure to hit it would have seen the tax breaks and incentives - originally granted by the former Christie administration to the China Export-Import Bank - fall away.
The previously-sealed 'Heads of Terms' for Baha Mar's construction completion, disclosed earlier this year, revealed that CTFE's purchase closing deadline had been extended to December 1, 2017, from November 22, 2017. This was done via a letter signed by Creswell Sturrup, then-permanent secretary in the Prime Minister's Office, which was attached as an amendment to the 'Heads of Terms'.
Bradley Roberts, the former PLP chairman, used the Baha Mar deal's closing to justify the former administration's strategy in allying with the Chinese - China Export-Import Bank and the project's main contractor, China Construction America (CCA) - to remove the original developer, Sarkis Izmirlian.
Arguing that the former government "had the right policy and vision for Baha Mar", Mr Roberts said in a statement: "With the casino hotel and SLS already open, Bahamians can look forward to the opening of the Rosewood brand, which has committed some $50 million into that project alone.
"With thousands of Bahamians already employed and scores of contractors engaged, this means thousands more jobs for Bahamians, contractors, and service providers. In CTFE of Hong Kong, Baha Mar is now owned by a world-renowned developer of highly successful luxury hotels, and an owner with the financial capacity to market, develop and grow this magnificent property called the 'Riviera of the Caribbean' into the envy of the world."
Mr Roberts' statement is unlikely to end the questions surrounding the former government's decision to turn against Mr Izmirlian and his Chapter 11 bankruptcy petition, which the former PLP chairman argued would have resulted in the mega resort project still being closed had it been allowed to play out.
CTFE, the Hong Kong-based conglomerate controlled by the Cheng family, committed in its Baha Mar 'Heads of Agreement' to incur "acquisition consideration, pre-opening expenditures and operating losses and capital spending of at least $2 billion".
It has already achieved one 'milestone' in ensuring the SLS property was opened by December 1, while the 'Heads of Agreement' also relieved CTFE of the obligation to "fund all public infrastructure costs outside the boundaries of the project necessary for a world-class resort, in addition to providing for waste treatment or back-up electric power and water desalination facilities". These obligations had been imposed upon Mr Izmirlian.
It also remains to be seen whether the Government will meet the December 31, 2017, targets to address the New Providence landfill, Bahamas Power & Light's (BPL) energy supply issues, and the Water & Sewerage Corporation's provision of a waste treatment facility to CTFE and Baha Mar's satisfaction. Failure would relieve the latter, at least temporarily, from its own 'Heads of Agreement' commitments.