Jagdeo prefers selling Marriott to single buyer rather than selling it to Guyanese in shares

Jun 12, 2023 News

By Shervin Belgrave

The Marriott Hotel

Kaieteur News – Vice President, Dr. Bharrat Jagdeo on Thursday made it clear that his government prefers selling out the profitable Marriott Hotel to a single buyer rather than allowing the Guyanese people to purchase it in shares.

Vice President, Dr. Bharrat Jagdeo

The VP made his position known at his Party’s press conference held at Freedom House after Kaieteur News asked him if the government had ever considered selling the hotel to Guyanese in shares.

After giving a brief explanation of why he prefers a single buyer, Jagdeo made it clear that his government is not going to change its decision to sell the Marriott to one person.

“…So we are proceeding with individuals (selling to a single buyer)”, Jagdeo said.

One of reasons for opting not to sell the hotel in shares, according to Jagdeo, is to avoid persons accusing him of selling to one of his party’s associates.

“…and next thing, if somebody close to the PPP (his party) bought some of the shares, next thing you gonna hear Jagdeo sell some of the shares to a PPP person”, the Vice President told Kaieteur News.

In justifying his government’s decision that it will be more profitable to sell to single buyer, the VP questioned what would have been the price per share if it had decided to take that route.

“So you saw from a single investor what price we got and Kaieteur News wanted us to sell it for 55 (US$55M), the highest bid came in (US$90M), if from a single investor, you are going to get that, where do you think you gonna get the price per share? What would you set the price per share at? What do you think price in your valuation should be? Should we set it 90 dollars (US$90) for the Guyanese or 55 dollars (US$55)?”

The US$55M that Jagdeo was referring to was the second highest bid placed for the Marriott during a first round of bidding that took place in April. That bid was made by local businessman, Robert Badal, the owner of the Pegasus Hotel but he was outbidded by an American businessman, Ramy El-Batrawi who has a shady past.

The American entrepreneur in 2010 was barred from running a public company for five-years by the United States Securities and Exchange Commission (SEC) for being part of a US$130 million stock loan and manipulation scheme.

Despite his tattered business record, he was allowed to bid for the Marriott during the first round placing the highest offer of US$65M.

The government had halted the sale of hotel after that the bids were too low compared to the value of the hotel.

A new round of bidding was opened in May with a starting price of US$85M. Badal did not participate in the second round of bids but El –Batwari entered again with a bid of US$90M. His only challenger was a Guyanese consortium who came in second with a bid of US$86.1M.

In seeking an update of who the Government will sell the Marriott to, Jagdeo at his press conference said that the bids are still being evaluated by the relevant authority, the National Industrial and Commercial Investments Limited (NICIL).

The Marriott Hotel has been at the centre of controversy since it started under the Jagdeo administration when he was president. Reportedly using taxpayers’ dollars and with a syndicated loan through the Republic Bank Limited of Trinidad, the Marriott was built and opened its doors on April 17, 2015.

Under the syndicated loan agreement, the preferred rights go 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.

Jagdeo, however, maintains that there are no secret investors in the Marriott and claims that the hotel was built through an open and transparent process without any form of skullduggery or corruption.

With the discovery of oil in Guyana, the Marriott turned out to be a profitable venture and when the government decided to sell it, more controversial questions were raised as to why the government is moving to get rid of an asset that is making profits.

In explaining the reason behind the move, the VP during a press conference had said that while the hotel is making a profit, it is of no supreme benefit to the Government owning it anymore. Jagdeo had continued by saying 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 maximise the profit and sell the hotel.

According to Jagdeo, the proceeds of the sale is to 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.”

Notably, a decision by the former administration 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 from the bank – for a 13-year period. This was after the hotel was unable to service the loan. In order to prevent the hotel from being acquired by the bank, the former Government in April 2017 made the decision to transfer the hotel’s financial obligations to the Central Government.

However, VP Jagdeo stated that while in Opposition, the People’s Progressive Party (PPP) administration was opposed to the hotel’s financial obligation being transferred.

Guyanese, Jagdeo, Marriot, sale, selling, Single Buyer

1 thoughts on “Jagdeo prefers selling Marriott to single buyer rather than selling it to Guyanese in shares”

Daniel Gibran June 12, 2023 at 9:28 am

Why does this News Paper continue to refer to Bharat Jagdeo as
Dr. Bharat Jagdeo? The recipient of an Honorary Doctorate must
not be addressed as Doctor. Moreover, the recipient cannot use
said title in front or behind his/her name.

I should know. I am in academia with an earned Ph.D. from
a very prestigious university.

Comments are closed.

Latest News