Major progress was achieved in resolving a dispute over an unfinished luxury resort in the Bahamas, but no deal was reached among the four parties involved, the Bahamian government reported.
The negotiations took place in Beijing involving Baha Mar Resort, a Nassau property that would provide 2,323 rooms divided among four new hotels, 700 refurbished rooms at an existing Melia hotel and 200,000 sq. ft. of meeting space. Last month, Baha Mar filed for Chapter 11 bankruptcy protection and its developer, Baha Mar Ltd., filed a claim against lead contractor China Construction America (CCA), blaming if for delays in completing work on the property.
Travel Weekly reported that on Monday and Tuesday, representatives from Baha Mar Ltd., CCA Bahamas, Export-Import Bank of China and a five-person delegation from the Bahamian government met to negotiate the situation. According to a Bahamian government spokeswoman, the bank is proposing $200 million in new lending to help complete the resort, but insisted that the loan be guaranteed by either Baha Mar Ltd. or CCA Bahamas, which is part of China State Construction Engineering Corp.
Baha Mar Ltd. reportedly offered to submit a standby letter of credit for $25 million and CCA offered to guarantee the remaining $175 million if it receives a corresponding guarantee of $100 million from Baha Mar Ltd. The developer refused to make such a guarantee and suggested that instead, the Bahamian government provide the bank with a sovereign guarantee of up to $175 million, the spokewoman said.
CCA has issued a statement blaming Baha Mar CEO Sarkis Izmirlian for not agreeing to make the $100 million guarantee and on Wednesday, Baha Mar Ltd. rebutted the government’s version of the negotiations and accused Bahamain officials of posturing to score political points.
According to the government spokeswoman, the negotiations in Beijing, “ended with the parties agreeing to continue discussions among themselves. It was understood, however, that in the meantime the parties might continue to pursue other legal options.”
The Bahamian government has petitioned the Supreme Court of the Commonwealth in Nassau to force Baha Mar Ltd. out of the resort project. The government has requested the court to appoint a third-party liquidator that would oversee the restructuring of the resort. A hearing is scheduled for tomorrow.
Baha Mar Resort, which is 97 percent complete, originally was scheduled to open by the end of 2014. It is expected to lure major meetings and conventions to the Bahamas and provide thousands of local jobs. Besides the hotels and meeting space, it will include a casino, a golf course, and more than 40 restaurants, bars and clubs.
