Gov’t won’t back MSC cruise port takeover

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Deputy Prime Minister Chester Cooper. Photo: Donavan McIntosh/Tribune Staff

By YOURI KEMP

Tribune Business Reporter

ykemp@tribunemedia.net

The deputy prime minister yesterday said the Government will not back the acquisition of a controlling ownership interest in the Nassau Cruise Port by a single or group of cruise lines.

Chester Cooper, also minister for tourism, investments and aviation, said ahead of the weekly Cabinet meeting that no application has been submitted to the Government to acquire that 49 percent equity stake. And, even if such a proposal did emerge, the Government “does not wish for any one cruise line, or combination of cruise lines, to own and operate this port”. 

“That is still the position of our government, and if there’s an application we will consider it appropriately,” he added. However, it is unclear what the Government can do to block any deal given that any MSC purchase of Global Ports Holding will be concluded offshore outside The Bahamas.

Mr Cooper’s comments came after Tribune Business reported last week that Mediterranean Shipping Company (MSC) is weighing up whether to make a formal offer to fully acquire Global Ports Holding, the controlling shareholder in downtown Nassau’s cruise port.

Global Ports Holding, which is majority-owned by Turkish businessman, Mehmet Kutman, its chairman, won the bidding process initiated by the former Minnis administration for the 25-year concession to redevelop and operate The Bahamas’ major cruise gateway that received more than 3.5m passengers per year pre-COVID.

But the UK-listed company, the world’s largest cruise port developer/operator, ignited several concerns locally after it confirmed in a statement to the stock markets that MSC has made an approach to acquire 100 percent of the business. The latter, which already has numerous shipping and cruise interests in The Bahamas, now has until July 13, 2022, under the UK’s takeover code for public companies to make a formal bid to buy Global Ports Holding.

Several sources, speaking on condition of anonymity, said an MSC acquisition - if it succeeds - would result in the outcome that the Government (the Minnis administration) sought to avoid by selecting Global Ports Holding as the winning bidder. It rejected a rival offer for Prince George Wharf, which featured a consortium of cruise lines, precisely because it feared this would be akin to “the fox guarding the hen house”.

An MSC purchase would thus leave the Government with exactly the situation it did not want, where the cruise lines were both port developer and user, and with a much narrower ownership base than the consortium’s as well. However, discussions with Global Ports Holding, the world’s largest cruise port operator with 26 ports in 14 countries, are still at an early stage. MSC has until July 13, 2022, to submit a formal takeover offer under UK stock market rules.

MSC’s existing Bahamas interests stem from its Ocean Cay private island, located near Bimini, and the fact it is one of the two main cargo shippers calling on Nassau Container Port at Arawak Cay. It is also Hutchison Ports’ partner in the Freeport Container Port.

The shipping giant has also invested heavily in its cruise business, especially expanding its terminal in Miami. Thus it is not hard to see why it is interested in Global Ports Holding and, by extension, Nassau because of its need for additional destinations. It also has the finances required because, unlike rivals solely focused on the cruise business, it was able to keep operating during COVID due to its cargo shipping interests.

Mr Cooper, meanwhile, affirmed a renewed focus by the Government on approving Long Island investments. He said: “We foreshadowed last week and during the Budget debate that we will likely approve a project in Long Island worth $250m. There is a cruise port component involved, a small boutique resort in the vicinity of 250 rooms and a water park. We expect that to be presented to the NEC (National Economic Council) next week.

“We approved another project in southern Long Island in the general vicinity for a 10,000 acre development, of which 1,400 acres will be built out. The remaining will be a natural reserve which has the support of the Bahamas National Trust and we are excited about the prospects for these developments in the island of Long Island.” 

The latter project is thought to be The Salinas Bahamas, which bills itself as a “trailblazing marine park in Long Island”. The principals are Nina Pesavento, described as the project lead, and David Young, the property owner. Its Facebook page refers to meetings with the BNT, and shows the proposal was in existence when the Minnis administration was in office.

“We are transforming an abandoned industrial site in Long Island, Bahamas into a world class national park spanning 9,000 acres,” the Salinas page states. That “industrial site” is understood to be the former Maritek/Diamond Crystal salt mine. The Government’s renewed Long Island focus is thought to be connected to a possible by-election if the legal woes facing the island’s current MP, Adrian Gibson, force him to resign the seat.

Mr Cooper, meanwhile, said of the Grand Lucayan’s $100m sale to Electra America Hospitality Group: “We’ve met on a few occasions since we made the announcement. We have another meeting next week. We’re working through the agreements, including the Heads of Agreement and the definitive purchase agreement. We expect that those will go for review to the Attorney General’s Office some time this week, and we are still positive about closing the deal.

“Once I once I meet with the proposed developers early next week, I’ll have more to say about it. Suffice to say I’m very happy with the progress so far.”