Pegasus second highest bidder for “profitable” Marriott Hotel

Apr 18, 2023 News

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…proposes US$55.5M, highest bidder comes in at US$65M

By Renay Sambach

Kaieteur News – Local businessman and owner of the Pegasus Hotel, Robert Badal, is one of six vying for the acquisition of the “profitable” Marriott Hotel located in Kingston Georgetown and is the second highest bidder with a proposal of US$55.5 million.

The sale of the US$60 million hotel is being facilitated by Government of Guyana through National Industrial and Commercial Investments Limited (NICIL). Chief Executive Officer (CEO) of NICIL, Radha Krishna Sharma, disclosed to this publication that six bidders met Monday’s deadline for the submission of bids for the Marriott Hotel.

Among the bidders is an American company, a Jamaican company, as well as local companies. Coming in as the highest bidder at US$65 million is the American company X, LLC whose principal is listed as Ramy El-Batwari and Badal in second with a bid of US$55.5 million. The third highest bidder spot goes to a local consortium, Integrated Group Guyana Limited, headed by Ravindra Prashad with a bid of US$55 million.

At fourth spot there is Georgetown Investments and Management Services Inc. (Princess Hotel), General Manager Mustafa Eray Kanmaz bidding US$50 million. The lowest bidders are: NCB Capital Markets Limited, a Jamaican Company headed by Steve Gooding with a bid of US$33 million and Muneshwers Limited, owned by Amarnauth Muneshwer with the lowest bid of US$25 million.

According to NICIL’s statement, after bids were closed, the six companies were invited to attend a Bid Opening Meeting at NICIL’s boardroom located at 199 Camp Street, Georgetown. It was noted that representatives from two bidders were present at the boardroom while a third joined virtually. Thereafter, the six bids were opened and read aloud in the presence of the representatives as well NICIL officials. The bidders and their respective bids were recorded, signed and acknowledged by the bidders and NICIL officials.

Pegasus 

Back in July last year Badal opened up the iconic Pegasus Suites and Corporate Centre next door to the Pegasus Hotel. Built at a cost of some US$100 million, President Irfaan Ali had described the project as iconic and transformational, noting that no Guyanese living 30 years ago would imagine that such a project could have been possible here. He said that the building is one that has some history that no other could match, as it is the first that had so many Heads of Government stayed prior to its opening. The President noted that all who stayed previously had enjoyed their stay, so it is clear that serious thought was put into the project.

The Guyana Chronicle had reported that Badal, during his address at the official opening, said that the project is a historic one for the company, Georgetown, and Guyana as a whole. He noted that the project was conceived long before Guyana struck oil and even with the country’s new oil prospects, they are happy that the business could benefit from the spinoff opportunities.
The project, the investor said, is in reaction to the need for capacity-building and the expansion of rooms and conference facilities along with corporate spaces. Pegasus Suites and Corporate Centre comprises two towers, which feature presidential suites, a conference centre, a modern and chic restaurant and underground parking for over 200 cars. The luxurious hotel and corporate space was constructed by the China Harbour Engineering Company and features building materials from Spain, Germany, the United States of America and China and is said to be of international standard.

Profitable business

Meanwhile, with the companies bids ranging from as low as US$25 million to US$65 million – it should be noted that Vice President (VP) Bharrat Jagdeo, on March 30, 2023, disclosed that the Marriott Hotel is “a profitable venture” and is “making a profit”, but stated that it is of no supreme benefit to the Government owning it anymore.

The VP justified the sale of the hotel by stating that within a few years several hotels are expected to come on stream and in order to avoid competition, this is the best time to maximize the profit and sell the hotel. The US$60M hotel started under the Jagdeo administration when he was President using taxpayers’ dollars and with a syndicated loan through the Republic Bank Limited of Trinidad and had opened its doors on April 17, 2015.

During a press conference Vice President Jagdeo said that the proceeds from the sale of the hotel will be used, “to clear off the remaining loan and some of it will come back to the Treasury to be used back for whatever purpose is determined.”

Kaieteur News had highlighted that under the syndicated loan agreement, the preferred rights goes to those investors – meaning that in the event of the hotel being unable to service the loan – the unknown investors would have the first lien on the proceeds of any sale.

Back in 2017, AHI was unable to meet its due financial obligations to repay the syndicated loan. As such, AHI had requested the assistance of NICIL, the guarantor but the state agency was also unable to assist. In order to prevent the hotel from being acquired by the bank, the former Government in April 2017 made the decision to transfer AHI’s financial obligations to the Central Government. This decision has resulted in US$1.1 million ($226 million) of taxpayers’ dollars coming out every six months (since 2017) to service the US$27 million loan – for a 13-year period.

However, to this the Vice President had stated that while in opposition, the People’s Progressive Party Civic (PPPC) was opposed to the loan obligation being transferred to central government. Jagdeo claimed that the loan being burdened on taxpayers had nothing to do with the hotel being unable to service its loan.

The VP had pointed out too that despite the hotel was started at a time when others touted it as “a white elephant”, the hotel is now a money-making machine. He explained that as a result of the Government being generous to help trigger a new wave of hotel building, “…there is no particular supreme benefit to Government owning (the hotel), it’s better to maximise the money and invest it in something else backing healthcare or maybe in another facility…”

Moreover, the Government has been reported in the media encouraging investors to build hotels as part of their plan to advance the hospitality sector in Guyana. Notably, there are seven new hotels being constructed. The new hotels are expected to meet a demand of around 2,000 rooms by 2025.

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• bidder, Marriott hotel, Pegasus Hotel, Radha Krishna Sharma, Robert Badal

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