‘Govt must tell nation whether Marriott is up for sale as a losing entity or a profit-making business’ – Former Finance Minister, Winston Jordan 

Dec 15, 2022 News

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By Zena Henry

Kaieteur News – Guyanese is currently in the dark as to whether the ‘transformative’ US multi-million dollar Marriott Hotel which was built by the People’s Progressive Party (PPP) Government, is profitable or whether the entity will be sold at a loss now that the Administration is seeking to get rid of the almost US$60M holding.

Former Finance Minister, Winston Jordan says only the release of the hotel’s financial documents will reveal whether the controversial project was a plus or minus for Guyana.

In an interview with Kaieteur News just a day after the Government advertised the hotel’s sale, he described the action as “interesting” given the dilemma involving the project’s realisation. He indicated that a lot of money was needed to correct defects at the hotel and even more to service loans taken by the project’s handlers. It is unclear what position the hotel is in, and the former Minister believes that information should be communicated to the public.
He recalled that during the David Granger Government it was established that the Administration was not interested in owning a hotel and wanted to sell the business. He said it was soon discovered however that the state of the finances would not allow them to sell the company and realised sums more than what was invested.

Jordan highlighted that together with the fact that the hotel had some problems; that it had a loan outstanding to Republic Bank- and to sell, permission was needed from the institution, along with other financial issues, “Marriott in terms of profitability at the time was under question.” He said his understanding is that even the contract with the Marriott brand had an implication on sale. Jordan reminded that when the Marriott Hotel was built, to make it profitable was the building of the casino which had not happened by the time the Granger Government got in. Any selling of the hotel was deferred until the Marriott could be put into a ready state, the former Minister said. “Now, I don’t know whether Marriott is in any state to be sold for profit,” he added.
Jordan agreed that with the finances unavailable, it is unclear whether anything was invested to make the hotel profitable and if not, then it would be selling at a loss. He said one thing that is known for sure is that the casino was never built and so profitability is still a question.
“Unless you see the financials of Marriot you don’t know what is being sold because even if you are selling your shares, your shares have to be based on the profitability or the worth of the stock. And the worth of the Institution is not what you put in it but what the market is prepared to pay or value your shares at,” Jordan opined.

Oil and hotel

When asked about the growing oil economy as a positive marker for the hotel’s profitable sale, the former Minister said, “it would not be wise to speculate where numbers are concerned, because if the casino was built it is difficult to say even now and even with 100 percent occupancy whether the hotel will be profitable.” He said Marriott still has its casino license. It is unclear however whether the license will be sold with the facility, although Jordan believes it could be part of the deal to make it more attractive.
In 2017, during a state media broadcast, Jordan had said that massive misspending by the current Government appeared to be “more than just mistakes” and advocated for some type of accountability.

He said that the Government was at the time saddled with a large debt despite putting a large amount of equity. He had highlighted the Marriott project and the Skeldon Factory, another failed expensive Government venture, at the time. He said the Granger Government was forced to “take over Republic Bank’s debt of US$17.7M to repay because the Atlantic Hotel Incorporated (AHI) was broke and had no money.” He said too that on that project alone the Government had to find another Guy$5.3B to fix defects on the hotel.
Marriott was opened in 2015 to be a first class branded hotel. It is owned by the Government through the National Industrial and Commercial Investments Limited (NICIL) but was owned by bankrupt Atlantic Hotel Inc. (AHI), a special purpose company established by NICIL. To prevent the hotel from being acquired by Republic Bank, the Granger Government transferred AHI’s financial obligations to the Central Government costing taxpayers US$1.1 million ($226 million) every six months since 2017 to service the entire US$27 million loan for 13-years.
NICIL said it is seeking Expressions of Interest (EOIs) from persons or companies, individually or as part of a joint venture / consortium, with an interest in purchasing its shares in AHI for the acquisition of the Guyana Marriott Hotel. Pre-qualification must include financial capability in terms of net worth, audited financial statements for the last three financial years), net worth minimum (approximately US $250 million), and letter of financial capability from a recognized financial institution(s) to acquire NICIL’s shares in AHI for the Guyana Marriott Hotel.

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