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Suspected sale of Le Meridien…

Oct 25, 2008 News

Govt. fuming over being left out of process

The National Insurance Scheme (NIS), by way of its representative, the National Industrial and Commercial Investments Limited (NICIL), yesterday issued a statement initialled by head of the NICIL, Winston Brassington that via a Starman representative NIS has learnt that a share purchase agreement (SPA) was executed some weeks ago for Le Meridien.
The SPA was conducted between an overseas-based company, of which Robert Badal is a principal, and Starman, which was the previous majority shareholder at Le Meridien.
According to the statement issued yesterday by NICIL, responding to newspaper reports, the Government, some weeks ago, wrote to Starman inquiring whether the hotel had been sold.
It was noted that the Pegasus rules require any share transfer to be approved by its Board, on which the NIS has a representative.
“To date, despite reports of an executed SPA, this has not been done…The government has expressed its concern  about  the process regarding the sale, and particularly that governance procedures appear poor, and that NIS, as a minority shareholder, was not aware of the reduction of a sale price and implications for its value.
The release added that the Government will continue to raise concerns, and did not consider the matter closed.
Early last month, word of a sale of shares leaked, and this newspaper was reliably informed that the investors of Le Meridien were considering a sale of the hotel when the franchise’s contract expires in October.
Reports at that time had suggested that the investors were in discussion with potential buyers interested in the hotel, with a sale likely before year’s end.
The frontrunner has been identified as a local entrepreneur, who turned out to be Badal, whose bid at that time stood at some US$8M but was under negotiation.
Kaieteur News has already confirmed that the investors were also contemplating the re-branding of Le Meridien, reverting back to Pegasus.
This was confirmed by the hotel’s general manager Bert Plas who, when contacted, said that it was under consideration but at that time was only at “the discussionary level”.
According to Plas, the brand “Pegasus” has more of an impact on travellers/ tourists in Guyana.
When asked about the sale, Plas noted that he was unaware of any such move, but posited that any hotel could be sold at any time.
This newspaper understands that meetings have taken place recently with senior Government officials on the issue, but this was denied by Finance Minister Dr Ashni Singh, who at the time said that he was unaware of any such sale.
This would be the second sale of a large hotel in Guyana in a year, following the sale of Buddy’s International Hotel to a Turkish hotelier.
The Zoom Inn Hotel has also been placed on the market for sale.
The local hotel industry is also expected to change face with the expected imminent construction of the major Marriott brand in a few years’ time.

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