PM Christie On Negotiated Arrangements For The Baha Mar Cable Beach Resort

It gives me great pleasure to announce that earlier today, the Government of The Bahamas, and the Export-Import Bank of China, signed an agreement under which the Baha Mar resort will be completed, and sold to a world-class hotel and casino operator.

Just after five o’clock this afternoon, The Supreme Court of The Bahamas approved these arrangements.

This agreement represents a signal achievement for The Bahamas, and a milestone in the troubled history of Baha Mar.

For some 20 months, I have been continuously focused, day and night, on efforts to find a solution for the completion of the Baha Mar Project.

Throughout this period, the Government has had Three Key Objectives:

Firstly, to ensure that construction at Baha Mar would be resumed as quickly as possible;

Secondly, to make every effort to ensure that the casino and casino hotel, the convention centre and its hotel, and the golf course, would open before the end of the 2016-2017 winter season;

And thirdly, to ensure that payment of claims to Bahamian creditors and contractors, who previously had little or no prospect of recovering anything from Baha Mar.

We have achieved ALL of these Objectives.

Under the Heads of Terms signed today by the Government and The Bank, the re-mobilization at Baha Mar will commence immediately.

Construction at the site is expected to resume within a few weeks, during the month of September.

The Bank has committed to fund all remaining construction costs to complete the Project.

China Construction will finish the works, and will resolve outstanding claims with its suppliers and sub-contractors.

The BahaMar companies owed money to thousands of Bahamian creditors when they filed for Chapter 11 Bankruptcy. Under their Chapter 11 efforts, our people had little prospect of being paid anything. Under this agreement, made today, funds will be made available to enable them to receive a significant part, and possibly ALL of the value of their claims.

Going forward, many of the same people and companies who were previously contracted, will be re-engaged to complete the Project.

The Government of The Bahamas and the Bahamian utility companies, such as BPL, will receive payment for some of their outstanding claims against the Baha Mar companies.

Throughout the negotiations, we have, first and foremost, been mindful of the impact that this stalled project has had on our people. Everyone involved in the discussions has been committed to this.

I am especially pleased to announce, therefore, that the thousands of former Bahamian employees of Baha Mar will receive the following outstanding amounts due to them: unpaid salaries, severance pay, accrued vacation pay, and notice payments due to termination. Additionally, sums deducted from employees and former employees’ salaries and pension contributions will be repaid.

Further, Bahamians holding commercial leases and concessions, will be permitted to continue to hold them.

As it has been done with all major investments, The Government will extend appropriate concessions, to facilitate the construction and promote the successful future operation of the resort. The completed project will then be sold to a qualified world-class operator.

My fellow Bahamians: there has been much gossip, and speculation, and downright false allegations made about the whole history and progress of the Baha Mar dispute. In such a sensitive negotiation, the Government thought it wise not to offer a running commentary on the discussions, not to say anything that might put the future of the project in jeopardy. It is a shame that others were not so prudent, and that so many un-informed views were promoted in the media.

The last few weeks have involved a Herculean effort by many, many people. This has been made all-the-more strenuous by having to deal with partners in vastly different time zones, often working through translators. I am enormously grateful to and proud of everyone, who in these last days, did what it took to dive across the finish line.

Participants in the negotiations have included the Attorney General, the Minister of Education, Science and Technology and my Senior Policy Advisor, supported by a technical team drawn from the Office of the Prime Minister and Ministry of Finance; legal advisors in the Office of the Attorney General and Ministry of Legal Affairs, Hogan, Lovells LLP (the Government’s US Attorneys) and Charles Russell Speechlys LLP (the Government’s UK Attorneys); and Mr. Grant Lyon, Liquidation Claims Advisor. The Chinese Ambassador to The Bahamas and the President of the Central Bank of China also have assisted. We are also grateful to the Presidents and Vice-Presidents of CEXIM, CSCEC and CCA.

I know you will have many questions as to the detail of what has been agreed. Over the coming days, the government will make publicly available all of the key items of information, so that you can read for yourselves exactly what the facts are.

There is still a raft of paperwork to be completed in order to implement this agreement.

The difficulties of a project this size has hit our economy hard.

But we will recover.

Over the coming months, economic opportunities will be felt in more and more homes.

The Government will redouble its efforts to continue the programme of modernization that we began four years ago.

My entire public and political life, has been dedicated to fighting for Bahamians.

I give God thanks and praise that we have been blessed with this outcome. This is a good day for The Bahamas.

This a great day for Bahamians.

Statement by The Rt. Hon. Perry G. Christie Prime Minister and Member Of Parliament on Negotiated Arrangements For The Re-Mobilization, Completion and Opening Of The Baha Mar Cable Beach Resort August 31st, 2016:

Mr Speaker,

I wish to table for the record a public statement that I made on 22nd August, 2016 announcing arrangements for remobilization, completion and opening of the Baha Mar resort.

When Mr Sarkis Izmirlian decided to have the Baha Mar companies, suddenly filed for Chapter 11 Bankruptcy in Delaware, without the knowledge of the Government and people of The Bahamas or its partners China Export Import Bank (“the Bank”) and China Construction America (“CCA”), they owed tens of millions of dollars to Bahamian creditors. The Government’s expert advisors advised then that Baha Mar’s Chapter 11 filings revealed that these Bahamian creditors had little or no prospect of being paid anything in Delaware.

During more than 20 months of complex and arduous negotiations, my Government and I were focused on achieving three things:-

Firstly, ensuring the re-mobilization of the property such that construction would be resumed as quickly as possible. We are pleased therefore that the casino and casino hotel, the convention centre and its hotel, and the golf course, are slated to open before the end of the 2016-2017 winter season.

Secondly, ensuring that the property is ultimately purchased and operated by a world-class operator ;

And thirdly, to ensure the payment of claims to Bahamian creditors and contractors, who previously had little or no prospect of recovering anything from Baha Mar.

Under the Heads of Terms of the Agreement signed last week, on August 22nd, 2016, re-mobilization was to begin immediately: this is already underway.

The Bank further committed to fund all remaining construction costs to complete the Project. Construction is expected to re-commence in September, next month

We are especially pleased that the Agreement also provides that the thousands of former Bahamian employees of Baha Mar will receive the following outstanding amounts due to them: unpaid salaries, severance pay,accrued vacation pay, and notice payments due to termination. Sums deducted from employees and former employees’ salaries and pension contributions will also be repaid.

Other Bahamian creditors and contractors will receive a significant part, and possibly ALL of the value of their claims. Many of the same people and same companies who were previously contracted will be re-engaged to complete the Project. We expect that Bahamians holding commercial leases and concessions will continue to hold them.

And, the Government of The Bahamas and the Bahamian utility companies, such as BPL, will receive payment for some of their outstanding claims against the Baha Mar companies.

Mr. Speaker,

I am happy to announce that a Committee, to be Chaired by His Excellency James Smith, has been established to process the claims of all of the Creditors. I am advised that they will make announcements imminently on how creditors may communicate with them and how they will process claims. We expect that the thousands of former employees of BahaMar will be paid by the end of September 2016 and that other creditor matters will be concluded on or by 31st December 2016.

Much has been made of the fact that the arrangements are currently under Seal in the Supreme Court of The Bahamas. The Application to have the documents sealed was made by the China Export-Import Bank.

This kind of Seal is standard, especially in transactions of this complexity, scale and international market-sensitivity. Remember, the Bank already has billions, BILLIONS, of dollars, invested in this Project.

The Bank is negotiating the sale of the property. We have made it clear that casino, convention centre and their respective hotels must be operated by world class specialists who must either have equity in the Project or make significant capital contributions to the Project.

Putting the documents under Seal enables the Bank to finalise these sensitive negotiations with the normal business confidences that one would expect. Despite the wishes of some, it is simply unrealistic to expect global businesses to conduct their negotiations in the media.

Mr. Speaker,

This is not unprecedented as I have said, very normal. The Court approved the sealing of the documents to help the parties secure the best outcome for the property, and the Court will lift the Seal if and when when it deems it right to do so.

Additionally, the suggestion that the Government has provided unusual concessions to conclude this deal are not true.

Most countries provide concessions to attract and encorage investment. Trade Agreements contemplate concessions. Our laws provide for concessions – to all investors.

My advisors instruct me to be cautious about what I say given the Court Order. I can say that CCA was given Hotel Encouragement Act concessions (for construction) by the FNM and will be given the same concessions (to complete construction) by my Government.

I can also say that Governments of The Bahamas are constrained by the Atlantis agreement in what they can offer any hotel and casino development. The concessions that will be offered to a new developer cannot exceed those given to Atlantis.

Mr Speaker,

My career has been in service of the Bahamian people. I thank those who were affected by Baha Mar and who spontaneously on 22nd August, with less than one hour’s notice were prepared to join me in making that significant announcement and among other things, acknowledged my Government’s commitment to Bahamians, that they trusted my Government to arrive at an outcome in the best interest of Bahamians.

Mr. Speaker,

I have no doubt that History and the Bahamian people will judge us kindly.

Mr Speaker,

We are a proud, strong and fiercely independent nation. It is this very strength that allows us to enter with confidence into agreements with investors from around the world.

In recent years, our relationship with China has strengthened because of our mutual interests. While they look for global opportunities in which to invest, we look for international investors to support our national development.

Mr. Speaker,

During many years of public service, we have before had to deal with developers who have run into problems. I have had the privilege of being able to learn from the successes and some of mistakes of past administrations.

We know from experience that it is not Government by soundbite that counts, but a willingness to put in the hours, to do the hard work, to bring people together and above all, to produce the best outcome for Bahamians.

Mr. Speaker,

After the long days and nights of these negotiations, I remain eternally grateful to my colleagues and members of staff who have worked around the clock and across time zones to achieve this excellent result.

Mr. Speaker,

I say again today, what I said to the country last week:

This outcome is good for The Bahamas and great for Bahamians.

God Bless the Commonwealth of The Bahamas.

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