Caribbean Plan To Attract Tourists

Tuesday, 11 May 2010 00:00 News Editor
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BAHA Mar and Scotiabank were last night said to be "close" to a resolution over the latter's $170 million syndicated loan that financed the developer's acquisition of the existing Cable Beach properties, sources close to the situation telling Tribune Business that "tremendous progress" had been made.

This newspaper was told that Baha Mar and the bank, which is involving executives from its Toronto head office in the talks, had been meeting since the developer signed the $2.5 billion loan with China Export-Import Bank to facilitate the $2.6 billion Cable Beach redevelopment.

"They've been meeting, and tremendous progress has been made," a source with knowledge of the situation told Tribune Business. "They may almost be at the point where they're close to a resolution."

Robert Sands, Baha Mar's senior vice-president for governmental and external affairs, declined to comment when contacted by Tribune Business about the status of the Scotiabank talks last night.

Still, other sources told this newspaper yesterday that the two parties seemed to be feeling "more positive" about reaching a successful conclusion amenable to both in the wake of Baha Mar's successful conclusion of talks with its Chinese partners, who also include China State Construction.

As revealed by this newspaper previously, Baha Mar needs to successfully resolve the situation over the Scotiabank loan, as it is said to be secured on the existing Sheraton Cable Beach, Wyndham Nassau and Crystal Palace Casino and associated real estate parcels at Cable Beach.

The potential complication is that real estate also includes parcels upon which China Ex-Im Bank will take security for its $2.5 billion loan.

The Chinese bank will need those assets delivered 'free of encumberances', to quote legal parlance, which is why Baha Mar and Scotiabank need to resolve their loan situation.

Scotiabank has already extended the due date twice - from December 31, 2009, to end-January 2010, and then to March 31, 2010 - to give the developer time to seal the deal with Beijing. That was concluded on March 30, 2010, and possibly explains Baha Mar's haste to last night seal the deal with the Chinese.

In the aftermath of that agreement's signing, Tribune Business sources indicated that Baha Mar set to "re-engage" Scotiabank over that loan, having prioritised sealing the agreement with China before turning its attention to this.

Baha Mar's strategy appears to have been to conclude successful negotiations with the Chinese before turning its attention to Scotiabank. This credit facility enabled the developer to acquire the existing Wyndham and Sheraton Nassau Beach resorts from Philip Ruffin and the Government.

Tribune Business previously reported how Baha Mar and its principals, the Lyford Cay-based Izmirlian family, had offered to make Scotiabank "whole" and repay the entire loan, having previously offered to pay down $85 million or 50 per cent during proposals that were swapped between the two sides.

"Baha Mar appreciates Scotiabank's support during these economic times, and is satisfied Scotiabank supports the development of Cable Beach," was all Mr Sands was prepared to say on the situation in a previous interview.

Meanwhile, Tribune Business also understands that Baha Mar and the Chinese have submitted their investment project proposals to the Bahamian government.

Source: The Tribune