Baha Mar Contractor Offers Additional Funding, Blisters Developer

The China-owned general contractor of Baha Mar offered to boost its investment in the unfinished Bahamas resort while criticizing the developer for its management of the project and its recent negotiating tactics.

CCA Bahamas, a unit of China State Construction Engineering Corp., said Sunday that it already has invested $150 million in the $3.5 billion project and has offered to fund another $100 million (no equity terms were specified).

The contractor also offered to provide a guarantee of $175 million to Export-Import Bank of China (the resort’s primary lender) in connection with the bank's new $200 million loan facility to developer Baha Mar Ltd.

CCA Bahamas also accused Baha Mar Ltd. of mismanagement and said it was owed $142 million in late construction payments and outstanding construction change orders. And, CCA Bahamas alleged that Baha Mar Ltd. “demanded” that CCA Bahamas take a 50% write-down on its equity investment to $75 million.

In a statement, Baha Mar Ltd. said the contractor's offer is "not a viable proposal on its part but rather a distortion of an old posture that made discussions to negotiate a consensual resolution with it as one of the parties a sham."

Baha Mar also said that it put forth a viable proposal to the Export-Import Bank of China that "provides for a significant equity infusion by the Izmirlian family to complete and open Baha Mar and would utilize Bahamian contractors and a Bahamian workforce to properly finish the work at Baha Mar that CCA failed to do."

The Izmirlian family, Baha Mar Ltd.’s owner, says it has already invested $900 million in the project. The developer says the resort is 97% completed.

Baha Mar Ltd. late last month filed for Chapter 11 bankruptcy protection in the U.S., then sued CCA Bahamas in a U.K. court.

Last week, a Bahamas Supreme Court judge ruled that the Bahamas didn’t have to recognize the developer’s U.S. bankruptcy filing, effectively preventing the developer from protecting its assets from creditors.

Bahamas Prime Minister Perry Christie earlier this month said the government would seek to have the Supreme Court, through an independent third party liquidator, supervise and control the restructuring of the resort and force the developer out of the $3.5 billion project.

Baha Mar, the most expensive private project in the Bahamas history, broke ground in Nassau’s Cable Beach area in February 2011. The five-hotel project had been originally scheduled to open to the public by the end of 2014 with more than 2,200 new hotel rooms. The resort’s opening date has since been pushed back multiple times.

Source: Travel Weekly