Talks to revive the stalled $3.5b Baha Mar resort casino project in the Bahamas have been extended but even if a resolution is reached, it could be another year before the unfinished project opens to the public.
Developer Baha Mar Ltd filed for Chapter 11 bankruptcy protection this summer after falling out with the project’s principal contractor and its chief financial backer, both of which are Chinese state-owned firms. A frustrated Bahamian government had threatened to ‘wind up’ the project unless the bickering parties were able to resolve their differences by Nov. 2.
On Tuesday, the Bahamas Supreme Court extended the deadline for the government’s winding up petition until Nov. 25. The extension had been requested by the Bahamas’ attorney general’s office on behalf of government stakeholders. The project is immensely important to the Bahamian government, especially after over 2,000 workers received layoff notices last week.
Baha Mar Ltd has accused contractor China Construction America (CCA) of failing to meet development timelines, while CCA counterclaimed that Baha Mar Ltd is broke and can’t pay its bills. The Export-Import Bank of China (EXIM) has reportedly been asked to cough up anywhere from $300m to $600m on top of the $2.5b it has already fronted in order to complete the unfinished project.
It appears increasingly likely that Baha Mar Ltd principal Sarkis Izmirlian will be forced to sever all ties with the project. On Tuesday, the Bahamas Tribune quoted Wayne Munroe, an attorney representing the country’s Gaming Board, saying it was time for Bahamians to “stop being nice on this Baha Mar thing.”
Munroe said Bahamians were being told that Izmirlian “has a big pile of money and this is his Baha Mar nation and he’s bringing none of it to finish it. And we’re entertaining him.” Munroe claimed Bahamians understood that “when you borrow money from the bank you got to pay them back. And if you don’t pay them back, then there are certain consequences.” Munroe issued a challenge for Izmirlian to “stop joking and do what is necessary to complete the project.”
A far more likely scenario is for EXIM, a secured creditor, to assume full ownership of the property and appoint its own liquidator. China’s government will then have to decide whether to push on or sell the project off piecemeal. Opposition politician Peter Turnquest said new investors would have to be found and “there are not that many people out there … with enough capital and faith to bring this project to completion.”
Regardless of who is left in charge when the smoke finally clears, few observers expect the Baha Mar resort will open anytime soon. Turnquest estimated it would be “six months to one year” at the earliest before the resort’s doors opened to the public.
