June 30, 2015

Developer of $3.5B Bahamas megaresort files for Chap. 11

KINGSTON, Jamaica — The developer of a $3.5 billion hotel-and-casino project under construction in the Bahamas announced Monday that it has filed for U.S. Chapter 11 bankruptcy protection.

Baha Mar Ltd. said the U.S. filings were being done “voluntarily” in an effort to complete construction and open the megaresort touted as the most expensive project ever undertaken in the Bahamas.

CEO Sarkis Izmirlian said he was “committed to doing all I realistically can to move Baha Mar forward” to completion and provide a “sparkplug” for the economy of the island chain off Florida's east coast.

“The Chapter 11 process provides the appropriate venue to create a viable financial structure that places Baha Mar's interests foremost,” he said in a statement.

The filing was made in U.S. Bankruptcy Court in Delaware and Baha Mar intends to file an application in the Bahamian Supreme Court seeking approval of U.S. court orders.

Plans call for an about 1,000-acre (405-hectare) complex with boutique hotels, some 40 restaurants and clubs, an 18-hole golf course and what's billed as the Caribbean's biggest casino. Court papers say the project is roughly 97 percent finished.

The developer hopes to arrange a “debtor-in-possession” financing arrangement of up to $80 million. That financing is expected to provide the company with the cash to pay for daily operations during Chapter 11 reorganization. Some $30 million would fund work over the next 30 days.

The project in the capital of Nassau was originally scheduled to open at the end of 2014. A “paced opening” set for March 27 and then a scheduled May grand opening came and went. The developer has not provided any new opening timelines.

As with previous Baha Mar statements, Izmirlian blamed the incomplete work and missed deadlines on lead general contractor China Construction America, which received a $2.4 billion loan from the Export-Import Bank of China and shipped in Chinese workers to construct the resort.

Executives with the Chinese company could not be reached for comment.