Chinese bank forecloses on Baha Mar, pushing Sarkis Izmirlian to the sidelines

baha-mar-foreclosureA Chinese state-run bank has succeeded in foreclosing on the troubled Baha Mar resort casino in the Bahamas, possibly spelling the end of the involvement of developer Sarkis Izmirlian.

On Friday, the Export-Import Bank of China (EXIM) convinced the Bahamas Supreme Court to appoint Deloitte & Touche as receivers for the unfinished $3.5b project, whose developer Baha Mar Ltd filed for Chapter 11 bankruptcy protection this summer.

EXIM, which has $2.45b invested in Baha Mar, had reportedly become concerned that the provisional liquidators appointed by the Court were failing to honor their mandate to ‘preserve and maintain’ the project’s remaining funds. EXIM are believed to have pushed for last month’s decision to lay off 2,000 resort staff while the project remained dormant.

The receivership effectively eliminates further input from Baha Mar Ltd, which has around $850m invested in the project. Izmirlian had burned no shortage of bridges over the past year as he fought with EXIM, the Bahamian government and China Construction America (CCA), the project’s primary contractor.

Izmirlian issued a statement calling the receivership a continuation of “the unfortunate pattern of disastrous actions taken by other stakeholders” since the bankruptcy filing. Izmirlian said EXIM and CCA were “more focused on legal and political maneuvers than solutions” and warned that these maneuvers were “destroying any hope that Baha Mar, as originally conceived for the Bahamas, can become a reality.”

Whatever Izmirlian believes, a source close to EXIM told Tribune242 that the bank’s plan was to “finish the building and get it open.” The project is said to be 97% complete, but EXIM is believed to have balked at providing the estimated $600m required to push the project over the finish line so long as Izmirlian remained in charge. Izmirlian reportedly made an offer last month to provide interim funding to the project but received neither a counteroffer nor even a reply from EXIM.