GGRAsia – Former developer seeks moratorium on Baha Mar sale

Former developer seeks moratorium on Baha Mar sale

Jun 27, 2017 Newsdesk Latest News, Top of the deck, World

A company called BMD Holdings Ltd, led by businessman Sarkis Izmirlian, is calling for a moratorium on the sale of the Baha Mar casino resort (pictured) to privately-held Hong Kong conglomerate Chow Tai Fook Enterprises Ltd (CTFE). Some facilities at the property, including the casino, opened for a “preview” period in late April.

BMD Holdings – via Baha Mar Ltd – was the original developer of the casino scheme in the Caribbean archipelago of the Bahamas. That developer filed for Chapter 11 bankruptcy protection in a Delaware court in the U.S. on June 29, 2015 claiming it faced debts of US$2.7 billion. But the Commonwealth of the Bahamas Supreme Court rejected an application seeking approval for the recognition on the bankruptcy orders issued by a judge in the United States, prompting the local government to search for a solution for the stalled project.

Hong Kong-based CTFE, an investor in casino resorts in Macau, Australia and Vietnam, confirmed in December last year that it had signed an agreement to own and operate Baha Mar.

In a statement issue on Monday, BMD Holdings urged the new government of the Bahamas to place a “moratorium on the completion of any sale of Baha Mar and other transactions” under the agreements signed by the previous government headed by former Prime Minister Perry Christie; the China Export-Import Bank, Baha Mar’s secured creditor; and China State Construction, the project’s main contractor.

BMD Holdings said in the statement that it had reviewed the heads of terms regarding concessions that were granted with respect to the sale of Baha Mar. The firm said the documents “confirm … that the previous administration [government] had engaged in the wholesale giveaway of hundreds of millions of dollars in tax waivers and concessions that the country could not afford”.

“The agreement also clearly raises the concern about the potential of corruption and self-dealing by members of the previous government, even beyond the now public self-dealing by the former Attorney General,” the company added.

BMD Holdings additionally urged the new government of the Bahamas, led since early May by Prime Minister Hubert Minnis, to “reopen the casino licence investigation” and publicly disclose the Gaming Board’s assessment of CTFE’s suitability.

Officials in the Bahamas approved in April a gaming licence for the Baha Mar casino. The gaming permit application was submitted by Sky Warrior Bahamas Ltd, described in local media as a subsidiary of CTFE.

In Monday’s statement, BMD Holdings also warned that it was mulling legal action against the parties involved in the agreement that led to the “yet to be completed” sale of Baha Mar to CTFE.

The documents containing the head of terms were approved for release by the Bahamas Supreme Court last week, according to local media reports. Other documents relating to the sale – namely the agreement detailing tax incentives – remain under a court seal.