Thursday, November 19, 2020
By YOURI KEMP
Tribune Business Reporter
Bahamians will get the opportunity to own a piece of Nassau's new $268m cruise port in the 2021 second quarter once tangible progress is made on its redevelopment, it was disclosed yesterday.
Michael Maura, Nassau Cruise Port's chief executive, said the offering of shares in the Bahamas Investment Fund (BIF), the vehicle that will hold a collective 49 percent of the new port on behalf of local investors, would also likely coincide with the cruise industry's return following COVID-19's devastating impact.
"Because we're dealing with a segment of the community that may not be used to making these types of investments, we felt that it was best to have something to show for it," Mr Maura said.
"So that's why we were looking at some time in the 2021 second quarter, where persons would be able to actually see work that had commenced, improvements and things underway, versus someone that is pretty savvy on the investment side that's preparing to put seed capital up based off an idea."
Mehmet Kutman, chairman of Global Ports Holdings (GPH), Nassau Cruise Port's 49 percent controlling shareholder, agreed that "the right timing would be when people can start seeing certain things" in terms of construction progress at Prince George Wharf.
Mr Maura, meanwhile, added that a 2021 second quarter placement of the Bahamas Investment Fund's shares will also "align with some cruise visits"
"The cruise industry is working very, very hard [to] work through the CDC’s (Centres for Disease Control) 40-page pathway to recovery," he said. "We are fairly confident that we're going to be seeing ships coming in, just gradually over 2021. Where you might get a ship a day early on in the year, you would get back to the five and six shows a day towards the end of 2021.”
Nassau Cruise Port and its financial adviser, CFAL, have pledged to take a "bottom up" approach to placing the Bahamas Investment Fund such that it focuses on attracting several thousand small retail investors rather than major institutions.
This is designed to ensure the Fund is not controlled by one majority shareholder, or a controlling clique of investors, with the minimum investment threshold set at $1,000. Global Ports Holding has also agreed to make financing available so Bahamians can purchase the Fund's shares.
Mr Kutman, meanwhile, said he foresaw no issues with raising the remaining $50m to $100m in capital required to complete Nassau cruise port's transformation. If arose, he added that "it's something that the Global Ports Holding parent can easily swallow".
While acknowledging that the global cruise industry will endure return "a phased return to normalcy" following the COVID-19 pandemic, Mr Maura said The Bahamas' proximity to the US gives it a major competitive advantage.
"You think about the project and the investments and the, you know, monumental improvement to our waterfront, to the expansion of berths to handle the largest ships," he added. "The interesting fact is that, notwithstanding the impact of COVID-19 on every industry around the world, if you look at the net growth in cruise ships, in 2021, as opposed to 2019, there's actually going to be more cruise ships on the way in 2021 than there were in 2019."