The resort developer and its potential partners, China State Construction and China Export-Import Bank, were said to be “close” to concluding an agreement, Baha Mar having been hopeful of closing the deal by year-end.
It is unclear whether that target will be met, but one source familiar with the situation told Tribune Business yesterday: “Ninety per cent it’s going to go. Now there’s a very good chance it’s going to happen. It looks like there’s a willingness on the part of the Chinese to do it. I think they’re very close.”
It is not known what the outstanding issues are, although one negotiating point had been Baha Mar’s desire for China State Construction and Engineering Group to take a larger stake than the initially-proposed $99 million, or 2.75 per cent, equity ownership. It is thought this has been resolved.
Robert Sands, Baha Mar’s senior vice-president of external affairs and administration, declined to comment when contacted by Tribune Business earlier this week. Other Baha Mar sources were equally tight-lipped, indicating something may be happening, the only detail that could be obtained being that all sides were “making excellent progress”.
While the Baha Mar go-ahead would be a massive boost for a Bahamian economy that badly needs a ‘shot in the arm’ following an estimated 4 per cent contraction in 2009, the deal is not done, and negotiations with Chinese companies – especially those that are state-owned – can often be difficult, with many twists and turns.
In addition, Tribune Business understands that the Chinese side is seeking at least 6,500 work permits for their nationals who will work on the Cable Beach project, although only 2,500 maximum will be required at any one time due to the sensitive political nature of the issue for the Government. This newspaper had been told that the work permit issue was a potential stumbling block for the deal as far as the Government was concerned, but this was denied to Tribune Business by sources close to Baha Mar. The number of required work permits was also disputed.
China State Construction said in an earlier statement that under the terms of the deal being worked out with Baha Mar, it would acquire a 2.75 per cent stake in the project with a $99 million investment. That is much less than the 43 per cent equity stake, and $212 million contribution, Baha Mar’s previous partner, Harrah’s Entertainment, was scheduled to make.
The value of the construction contract was pegged at $1.9 billion, with CSC saying work on the 1,000-acre project was due to start in early 2010, with an opening in late 2013.
Memorandums of Understanding (MoUs) have already been signed between Baha Mar and its Chinese counterparts.
Source: The Tribune