Latest update November 26th, 2024 1:00 AM
Marriott was on verge of being seized by bank – Finance Minister
Marriott Hotel was almost seized last year.
Government has admitted that it almost lost the Marriott Hotel last year after the facility was unable to make payments for its loans.
By stepping in, taking over the loans, the Ministry of Finance managed to renegotiate the interest rates downwards, reducing it from 8.65 percent to 6.28 percent.
The Minister was last week speaking about developments under his Ministry.
It would be the first time that the Administration has really been so blunt about the hotel, commissioned shortly before the May 2015 general elections by the People’s Progressive Party/Civic government, under the world-renowned brand.
It was supposed to be a flagship project that brought jobs and quality rooms to Guyana.
However, the construction of the hotel and how it was configured placed the project under a shroud.
The hotel, with its casino and recreation centre still to be built and made operational, is unable to make enough monies with the banks, led by Republic Bank Trinidad, warning management that the payments were due with interest mounting last year.
Jordan explained that it is a fact that for commercial purposes market rates of interest are the norms.
There could be cases of “sub-market” rates but this is given to Government, which has to relend to company in question at market rates.
In the case of Marriott, the big hurdle was the payments.
Government has been toying with placing the Kingston hotel on the market but it is worried about the price. On paper, almost US$80M has been spent for acquiring lands, development, along with the hotel proper.
In fact, Jordan is on records saying it is a wasted project that Guyanese taxpayers’ have been saddled to repay.
Atlantic Hotel Inc. (AHI), a company that is owned by Government, has no money to repay the loans that it took from Republic Bank Limited (RBL), forcing the Administration to step in or face the loans being called in.
The RBL loans were in excess of US$27M, it was reported.
Opened in early 2015, the 197-room hotel ran into early problems, not making enough money to repay the almost US$27M-plus syndicated loan it took from Republic Bank.
In fact, without the adjoining annex being completed and converted into a casino to an independent operator, the hotel will never realize a profit, even if all the rooms are filled.
Last year, up to June, the payments due to Republic Bank were a staggering US$2.356M.
Operating under tight checks and balances, the Coalition Government was unable to come up with the money in a hurry.
Payments semi-annually now have been brought down from US$1.750M every six months to US$899,000, or almost half.
By 2030, the Atlantic Hotel Inc. (AHI), the special company, which owns the facilities, has to repay the US$26.970M it owes to the bank.
Currently, four companies have reportedly shown serious interest in the hotel’s planned casino, including the Princess Group at Providence, and one from Suriname.
The hotel was birthed under the Bharrat Jagdeo administration with promises of local jobs being created. However, save for a few contracts for sand and other material, the jobs went mostly to the Shanghai Construction Group and its imported Chinese workers.
Even the landscaping jobs were handled by them.
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