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Bahamas – Chow Tai Fook enters negotiations to buy Baha Mar from its new owners

By - 31 October 2016

Chow Tai Fook Enterprises Limited (CTFE), a Hong Kong-based conglomerate involved in luxury jewellery and hotesl, has entered into negotiations to buy the US$3.5bn Baha Mar casino resort at Nassau’s Cable Beach.

CTFE has applied to the Government of The Bahamas for approval as a proposed investor and acquirer of the Baha Mar Resort, by way of acquisition of Perfect Luck Assets Limited (Perfect Luck), the company to which certain assets of the Baha Mar Resort have been transferred.

Dr. Henry Cheng, Chairman of CTFE, said: “CTFE is looking forward to having Baha Mar join its portfolio of world-class integrated resort development projects. We are fully committed to this project and plan to hire as many Bahamians as possible to work at the property.”
CTFE is dedicated to the successful opening of Baha Mar and will work with the Government to achieve the goal of a phased opening. As part of the company’s commitment to the project and The Bahamas in the immediate term, CTFE will invest millions ahead of the official deal completion through pre-opening activities and employment – which has already commenced and will be expanded in the coming weeks and months.

Graeme Davis, the President of CTFE’s Bahamas subsidiary added, “CTFE is a company that embraces and champions the culture and values of the communities where it does business around the globe. We are excited to create an experience in The Bahamas that showcases what we collectively have to offer the world. We are confident that Baha Mar will be a property that Bahamians can be proud of.”

As part of the remobilization efforts, CTFE is already in discussions with hotel brands previously involved in the Baha Mar project, including Hyatt and SLS Hotels. CTFE also intends to re-engage its subsidiary, Rosewood Hotel Group, as a luxury hotel operator at Baha Mar.

Given the non-disclosure agreement in place, the stakeholders involved are unable to discuss specific terms of the transaction or the negotiations at this time. However, we look forward to keeping the public informed on pre-opening activities.

However, the property’s original owners BMD Holdings has reiterated that it is willing to buy Baha Mar at a higher price higher than that which CEXIM or the CEXIM-related entity, Perfect Luck Assets Limited, may be able to obtain from any other possible buyer.

BMD said: “The fact is that a close reading of the Chow Tai Fook Enterprises press release makes clear that there is no deal between Chow Tai Fook Enterprises and CEXIM/Perfect Luck. If indeed Chow Tai Fook Enterprises and CEXIM/Perfect Luck are in negotiations, then it can only serve the interests of the seller and The Bahamas to have a competitive process to achieve the best outcome. BMD stands fully prepared to engage with the seller to achieve such.”

Baha Mar ran into problems almost two years ago towards the end of its construction when its owners attempted to put the project into administration.

Sarkis Izmirlian, Chief Executive Officer, BMD Holdings , added: “As part of my offer, I also made clear that this proposal to acquire Baha Mar would result in, among other benefits, all substantiated Bahamian creditors being paid in full and all Baha Mar employees – both Bahamians and expats – being paid the monies they are owed. Bizarrely, CEXIM has not acknowledged receipt of my proposal, nor has anyone associated with either the bank, the Receivers, or “Perfect Luck”, made contact with us.

”It makes neither economic sense nor is it in the best interests for the future of Baha Mar, or The Bahamas, that not one of these related parties have engaged with us to discuss our proposal,” he added. “It is indeed “extraordinary” that the entire sale to

“Perfect Luck” has been an intricate fabrication. The fact that the Receivers were not able to find an arm’s length buyer has nothing to do with the quality of the asset and everything to do with a process where bidders were not given information, and were forbidden to meet with stakeholders or to discuss the status of construction with any of the relevant parties. The fact that the Bahamian court signed off on the sale does not mean that a comprehensive and inclusive process was followed. It only means that your lawyers were able to craft a story sufficiently plausible for the bank to sell Baha Mar to itself and conduct a further sale of Baha Mar in even more secrecy. We can move ahead to a swift and mutually beneficial resolution for Baha Mar, which will result in the resort being open as soon as possible to serve the best interests of The Bahamas, as well as the bank. Now more than ever the country, in its time of need, requires us to come together.”

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