Latest update December 16th, 2024 9:00 AM
Gov’t. begins talks with US businessman for sale of profitable Marriott Hotel
Kaieteur News – The evaluation of the two bids received for the acquisition of the profitable Guyana Marriott Hotel have been completed; and the Government of Guyana (GOG) has moved forward with negotiations with American businessman, Ramy El-Batrawi, who proposed US$90 million for the hotel.
American businessman, Ramy El-Batrawi
This was announced by Vice President (VP), Bharrat Jagdeo, during his press conference on Thursday. The government had received two new proposals after quashing the first bid round for the hotel. The American businessman, only competitor was Ravindra Prashad, who had put in a bid of US$86.1 million for the hotel. The sale of the hotel is being facilitated by the National Industrial and Commercial Investments Limited (NICIL).
Jagdeo said, “NICIL has completed the evaluation. They have ranked the firm had a bid of (US)$90 million as number one ranked, the highest bid and they (NICIL) have been given the authority to engage in negotiations with that company.”
The Marriott 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. 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.
Vice President (VP), Dr Bharrat Jagdeo
On May 2, 2023 the government had informed the six bidders that their initial bids were rejected, because the bids were too low and did not reflect the true value of the hotel. Thereafter, four of the bidders dropped out leaving X, LLC owned by El-Batrawi, initially bidding US$65 million and local consortium Integrated Group Guyana Limited, headed by Prashad, who had US$55 million making new proposals to meet the set base price.
Kaieteur News had highlighted that the hotel’s top bidder was barred by the United States Securities and Exchange Commission (SEC) back in 2010 from acting as an officer or director of a public company for a period of five years. It was reported that the US body had filed fraud charges in 2006 against Ramy El-Batrawi, and others arising out of a US$130 million stock loan and manipulation scheme. Notably, while El-Batrawi never accepted wrongdoings, in April 2010 the final judgment resulted in him being barred from running a public company for five years. This publication had also highlighted that El-Batrawi visited Guyana twice last year, October 2022, and November 2022. The American businessman had praised the time he spent with President Irfaan Ali during his visits to Guyana.
One month later, NICIL announced the Government’s decision to sell the hotel. In March 2023, Jagdeo revealed that despite the criticism the hotel faced when the construction was announced – the hotel had emerged as a profitable venture, but justified the sale of the hotel by stating that it was a business decision.
The Guyana Marriott Hotel
In fact, the VP said during a press conference that while the hotel is making a profit, it is of no supreme benefit to the Government owning it anymore. Jagdeo 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.
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