(Adds comment from Baha Mar developer)
By Tim McLaughlin
July 17 (Reuters) - Bahamas Prime Minister Perry Christie plans to take control of an unfinished $3.5 billion mega resort, currently tied up in a corporate bankruptcy process, and push it through to completion to help bolster his country’s fragile economy.
Christie, in a speech Thursday night, called for liquidators to take control of the Baha Mar resort and casino project. A fully operational resort would employ about 5,000 people and boost the Bahamas’ gross domestic product by more than 10 percent.
“The completion of the Baha Mar resort is a matter of the utmost national importance,” Christie said. “Baha Mar must open.”
Talks this week in Beijing between the project’s main lender, China’s export import bank, and the developer, Sarkis Izmirlian, have not resolved how to fund the resort’s completion, Christie said.
Izmirlian’s Baha Mar Ltd said the move by the Bahamas government jeopardizes the resort’s assets and future, according to a statement issued on Friday. Izmirlian’s family has invested more than $900 million in the project.
“In effect the government of the Bahamas legal maneuvers are an attempted nationalization of a private investor’s assets,” the statement said. The developer said talks with the Chinese continued on Friday.
Meanwhile, Christie said the Bahamas attorney general will proceed with compulsory or involuntary liquidation proceedings with the ultimate goal of opening the resort.
Baha Mar Ltd filed for Chapter 11 bankruptcy protection in a Delaware court on June 29. Christie said Izmirlian did not give his government any prior notice before the filing.
Christie said the bankruptcy process in the United States could result in a substantial delay in finishing the resort, which is 97 percent complete. The provisional liquidation he has called for would allow a neutral party to take control and put the resort on the right track for completion, he added.
“(These proceedings) are designed to work in very similar terms as a Chapter 11 (bankruptcy), but with the stark difference that they will be controlled by provisional liquidators under the supervision of the Bahamian courts rather than being controlled by Mr. Izmirlian,” Christie said.
Construction has been suspended for several months after Baha Mar ran out of money. Izmirlian blames China Construction America, a unit of China State Construction Engineering Corp Ltd , for delays that forced the resort to miss a March deadline for opening. CCA says Izmirlian’s Baha Mar Ltd mismanaged the project.
During negotiations this week in Beijing, Izmirlian’s team made bigger-than-expected funding demands, according to Christie.
“It transpired at the Beijing negotiations that Baha Mar’s additional funding requirements had increased considerably,” Christie said in his speech.
“(It) now included not only funding for completion of construction, but funding to meet start up and operating expenses; funding to cover other liabilities and deferral of principal and the initial balloon payments under the loan facility with (China) Eximbank.” (Reporting By Tim McLaughlin; Editing by Nick Zieminski and Tom Brown)