Latest update December 25th, 2024 1:10 AM
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Hong Kong investor pulls out from casino management
– Govt. mulls offering public shares in Marriott
Government has not ruled out the possibilities of public offering of shares in the Marriott Hotel which is set
Winston Brassington
to open its doors in just over a month.
The disclosure came yesterday amidst news that a court case blocking the mortgaging of the Kingston seawall lands has affected the release of more than US$35M from Republic Bank and a Hong Kong-based equity investor.
The court case was filed in December by Desmond Trotman, former Member of Parliament for A Partnership for National Unity (APNU). In effect, it derailed the financing, forcing Government to step in and put up US$16M of additional funds to ensure the hotel was completed.
Under the financing structure, Government says that it had initially invested around US$20M or a third of the total costs –US$58M. It further invested another US$16M after it became clear that no monies were coming from investors.
The question raised by the Opposition was, why the Government was throwing in the majority of the monies but is still planning to go ahead with plans to transfer 67 percent equity ownership into the hands of Ace Square Investments?, the Hong Kong investors who were putting in just US$8M.
Some US$27M of costs would have been coming from a syndicated loan via Republic Bank. Just over US$15M of the US$27M has been released by Republic Bank.
During a press conference at Marriott Hotel yesterday, Winston Brassington,
Staffers under training at the Marriott Hotel having lunch in the ballroom.
head of the Atlantic Hotel Inc. (AHI), the government-controlled company which is handling the construction, insisted that without the intervention of Government, the project would have been in deep trouble, with delays and losses likely.
He said that notwithstanding the court case, he has warned the Hong Kong investor that the entertainment complex, which includes the casino, that a decision will have to be made on the way forward. The way forward, he admits, may include a “relaunch” which offers shares publicly.
Meanwhile, it was disclosed yesterday that the Hong Kong investor has pulled out of managing the casino. This came in the wake of the failure of Guyana last year to pass key anti-money laundering and terrorism financing legislation. Guyana was blacklisted and referred to the world regulatory body – Financial Action Task Force (FATF) – by the regional body – Caribbean Financial Action Task Force (CFATF).
One of the regular rooms at the Hotel.
The management of the casino is now contracted to Marriott International which has experience in other countries.
Brassington insisted yesterday that it was never the intention for Government to own a hotel. Rather it was structured deliberately as a private/public/partnership (PPP) initiative.
The current expense for over 200 staffers already hired and other overheads are currently being covered under the capital expenditure included in the US$58M cost of the project.
Brassington, who has been under fire for his role in the sale of state assets and other investments as the head of the Government-owned National Industrial and Commercial Investments Limited (NICIL), claimed that the level of attacks by the Opposition on the Marriott project was the worse in his 20-year career.
The hotel, which is projecting a “conservative” 40 percent occupancy rate for the first year, will be able to cover its expenses, Brassington assured.
In the Presidential Suite
Marriott officials are expected from overseas shortly to conduct inspections to ensure it meets international standards before the hotel is handed over by Shanghai Construction Group, the Chinese contractor.
Brassington made it clear that the Hong Kong investors would have been vetted by Marriott to ensure that everything is above board. The five-star rating, consistent with Marriott’s branding, is expected within a month after the proposed April 16 opening, he disclosed. It will be the first major international brand to come to Guyana in over 45 years.
The 197-room hotel will include the country’s largest ballroom, conference centres, restaurants and the casino.
The project was under fire after it was announced that NICIL would have been using tax dollars to fund the project. With not much details coming out, the Opposition and other concerned citizens have been critical of the details and cost, as well as the highly controversial decision for one investor to put in US$8M and control 67 percent of the equity shares.
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