Jan 03, 2017 News
-But yet to earn a single cent on investment –Officer in Charge
By Kiana Wilburg
Even though the National Industrial and Commercial Investments Limited (NICIL) has invested millions of dollars in the Marriott Hotel, the entity is yet to draw back a single cent from the business venture.
This is according to Officer in Charge of NICIL, Horace James.
During NICIL’s end of year press conference on Friday, the officer was asked that given the state of affairs, why is there a strong interest in moving forward with the completion of the Entertainment Complex for the Hotel. The Casino and Entertainment Complex of the facility was proposed at an additional US$16M.
James said, “We attended the Annual General Meeting for the Marriott Hotel and the Board still believes that it is the way to go. The members believe that once they go through with that, they will be able to get over the financial hurdles being faced now.”
The NICIL Officer said that the Marriott Hotel is able to generate finances to remain operable. He emphasized however that the company is yet to make enough to service its debt.
He said, too, that the decision to go forward with the Entertainment Complex is hinged on the fact that the feasibility study for the hotel supports its establishment.
James was asked to identify who is going to fund the Entertainment complex. He said, “There is still some outstanding money from Republic Bank that might be possible. The board in charge of the Hotel will obviously have to revise its plan to the Bank and I believe that it is working on that aspect.”
The official confirmed that NICIL would be held liable for that loan as well.
James was also asked who is going to repay the loan if Marriott has found itself in a position where it is only able to break even.
The Officer in Charge of NICIL said that the entity has written to the Minister of Finance, Winston Jordan, requesting help in this regard. He said that Atlantic Hotel Inc. (AHI), the Special Purpose Company established to own the Marriott Hotel in Kingston, Georgetown, has also written the Bank on the matter. This issue is yet to be resolved.
“Most of the money that we had was utilized in Marriott hotel. We have purchased shares in the hotel to the tune of US$4M ($800M) and that gives 100 percent ownership. We have the subordinated bonded shares with US$15.5M. There was also some bridge financing done by NICIL which was done prior to June 2015.”
Additionally, the NICIL Officer was asked to say if there were any preferential buyers outside of NICIL for the Marriott Hotel.
In this regard, James said, “I am not certain. I know a loan was taken in the name of AHI. NICIL stood as the guarantor and that is a problem…But it is correct to say we are the 100 percent shareholder in the Marriott.”
It was only last year that Finance Minister Winston Jordan said, that if the price is right, Government would be willing to rid itself of the Marriott Hotel.
At the time, Jordan was asked to provide an update on what Government has decided to do with the Hotel it inherited from the previous regime.
He recalled that the government has made it clear on several occasions that it has no intention of being competitively involved in the hotel industry.
When asked about the possibility of Government selling the hotel, Jordan responded, “Let me put it this way, if Government gets a credible offer or buyer, it will divest itself of the hotel.”
The Finance Minister said that Cabinet has established a subcommittee that is looking at the issue and the best way of relieving the government of any responsibility in owning the hotel.
He noted that the Committee includes members such as Business Minster, Dominic Gaskin and Junior Finance Minister, Jaipaul Sharma.
The Finance Minister reiterated, “Government is determined not to own the hotel.”
Junior Finance Minister, Jaipaul Sharma, has since expressed the belief that any serious attempt to sell the Marriott Hotel would perhaps see the Government pushing for the completion of the hotel’s casino and entertainment complex.
In a recent interview, Sharma said that this was one of the issues raised during a meeting with the members of the subcommittee set up to plan the way forward for Government regarding the future of the Marriott.
AHI had initially approached Republic Bank to secure a loan from a consortium of investors to raise US$27M. However, this was cut short as a result of court action filed by then opposition Member of Parliament, Desmond Trotman.
That court action resulted in only US$15.3M being transferred from Republic Bank to Atlantic Hotel Inc for the multi-million dollar hotel.
Sharma noted that the case, according to his information, has been dropped. Now AHI has access to some US$11M, the remainder of the $27M loan from Republic Bank.
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