The troubled Baha Mar resort casino project in the Bahamas is officially up for sale following the appointment of a Canadian property firm tasked with identifying potential buyers.
This week, the Bahamas Tribune reported that the Deloitte & Touche (Bahamas) firm handling the receivership of the unfinished $3.5b Baha Mar integrated resort had appointed Toronto-headquartered Colliers International to market the property to prospective buyers.
The Bahamas Supreme Court has signed off on the appointment, which is aimed at finding someone to take the property off the hands of its principal creditor, China Export-Import Bank (EXIM), which foreclosed on the property last year after project developer Sarkis Izmirlian found himself unable to pay primary contractor China Construction America (CCA) and filed for Chapter 11 bankruptcy protection.
Trouble is, despite Izmirlian’s original claim that the project was 97% complete, other observers have estimated a new buyer would have to invest anywhere from $600m to $1b to bring the project up to snuff and engage in sufficient marketing to disassociate the whiff of failure that has attached itself to the property.
There’s also the fact that EXIM is demanding to be ‘made whole’ on its $2.45b investment in the project, despite observers’ estimates that the best the project can hope for is 50¢ to 60¢ on the dollar. For these and other reasons, Colliers has concluded that the search for a buyer will likely take at least several months.
The fact that the project was forced to lay off 2k local residents who’d been hired for the property’s oft-delayed opening has put no small strain on local politicians. Bahamas Prime Minister Perry Christie has repeatedly insisted that many prominent developers have inquired about the project but so far none of these tire kickers appear to have liked what they saw and/or heard.
Meanwhile, Izmirlian is asking the Supreme Court to allow him to pursue a $192m claim in the UK High Court against CCA without the involvement of EXIM. Izmirlian has alleged that the receivers are stalling his claim because the bank – which is paying the receivers’ bills – and the contractor are both Chinese state-owned firms.
Izmirlian’s claim accuses CCA of being so focused on other Caribbean resort projects that it took its eye off Baha Mar “at a crucial time,” bringing the project to the “point of failure.” Izmirlian’s Baha Mar Ltd reportedly invested $850m in the project before it went broke.
