Tue | Aug 22, 2017

Baha Mar resort acquired by Hong Kong developer

Published:Wednesday | December 14, 2016 | 12:00 AM
A scaled version of the Baha Mar mega resort complex on display.

The Baha Mar resort development has been sold to property developer CTF BM Holdings Limited, Prime Minister of The Bahamas Perry Christie announced Monday.

CTF is a subsidiary of Hong Kong-based conglomerate Chow Tai Fook Enterprises Limited.

The US$3.5-billion mega resort project, to feature a casino and more than 2,000 hotel rooms, had been stalled by bankruptcy filings of its original developer.

The sale to CTF was overseen by the local court.

"To put this agreement in context and to appreciate its immense importance to the people of The Bahamas and our national economy, it is helpful to consider the scope and review the recent history of the Baha Mar project," said Christie.

"The project is comprised of four new hotels in addition to the existing Melia hotel, boasting more than 3,000 guest rooms, a new 95,000-square-foot casino, a new 200,000-square-foot convention centre, 60,000 square feet of retail space, a new 18-hole golf course, a racquet club," he told legislators.

The original project owners, Baha Mar Limited led by Sarkis Izmirlian, filed for bankruptcy in Delaware, United States, on June 29, 2015. But after failed talks to resolve differences between Baha Mar and the project contractor, the Christie administration sought legal authority in relation to the project, which at the time was about 95 per cent complete.

 

PETITION TO WIND UP

 

On July 16, two weeks after the Delaware filing, the Bahamas attorney general filed a petition in that country's Supreme Court for the winding-up of the Baha Mar group of companies and applied for the appointment of joint provisional liquidators.

"The Supreme Court agreed that there was no justification for subordinating Bahamian insolvency proceedings to be under the jurisdiction of the court of Delaware or for compelling thousands of Bahamian creditors to participate in such bankruptcy proceedings," Christie said.

"In October 2015, the Export-Import Bank of China, as secured creditor, exercised its right under the debenture and appointed joint receiver managers to take control of Baha Mar's properties."

The assets of the unfinished resort were initially sold in August 2016 to an affiliate of China Exim, called Perfect Luck Holdings Limited, ahead of its final sale to a new investor.

Christie, who gave a long history of the events leading up to the sale, said much of the detailed information surrounding the acquisition remains sealed and that he is only now able to speak within the confines of the court order.

He said construction of the resort has resumed and should be wrapped up in phases, the first ending April 2017, with full completion of the project by fall of that year.

"CTF has indicated its vision for the resort as a sophisticated blend of luxury choice in lodging, entertainment, gaming, dining and retail - all while remaining uniquely and authentically Bahamian. To further substantiate its commitment, CTF has committed to invest tens of millions of dollars ahead of the phased opening through pre-opening activities, and employment," the PM told legislators.

He said the resort is expected to bring an additional 315,000 air passengers annually to The Bahamas.

"Baha Mar will create an estimated 5,500 to 7,000 jobs for Bahamians. Furthermore, Mr Speaker, the economic and fiscal affects will not only be felt by those Bahamians employed, but will also benefit a plethora of Bahamian businesses, both large and small," Christie said.

"Baha Mar will undoubtedly add to our tourism product, and significantly impact growth and economic prosperity in our country. This is a new day for The Bahamas."

- CMC