Senator Philip Galanis was the ‘point man’ for a group of Bahamian investors who made an offer to purchase the Grand Bahama Port Authority (GBPA), The Tribune can reveal, but their bid was “soundly rejected” by its shareholders.
One source with knowledge of the issue told The Tribune yesterday: “Harvey Tynes was counsel for Mr Galanis, and Mr Tynes and Mr Galanis met with the shareholders and discussed and made an offer to buy the company for hundreds of millions of dollars. The offer was soundly rejected.”
It is unclear as to which group Mr Galanis was representing, although unconfirmed reports suggested that one of the likely investors was Captain Jackson Ritchie, owner of Global United.
Captain Ritchie has strong Freeport connections through his original company, Tanja Enterprises, which was formed in 1991 and has since morphed into Global United through the acquisitions of United Shipping of Freeport, Global Customs Brokers and World Bound Couriers Ltd, and Sea Air Aviation Ltc: of Nassau.
Global United is currently attempting to close its purchase of Discovery Cruise Line. Mr Galanis is the company’s corporate adviser.
Apart from the group represented by Mr Galanis, The Tribune understands that there is at least one other Bahamian consortium interested_ in acquiring the Port Authority from its chief shareholders, the St George and Hayward families.
In addition, well-placed sources have confirmed to this newspaper that Hannes Babak, who replaced Julian Francis as the Port Authority’s chairman, also previously harboured plans to put together an investor group to purchase the company.
When contacted by The Tribune yesterday afternoon, Mr Babak confirmed he had once sought to put such a group together, but had dropped that plan completely.
“That is not a question any more. It will not happen,” Mr Babak said of his previous plan.
In response to The Tribune’s questions, Mr Babak confirmed that Mr Galanis had made an offer to acquire the Port Authority, but that it had been turned down.
Mr Babak said: “The shareholders are not interested in selling, and they’re happy with the management and structure of the company now.”
Mr Galanis did not return The Tribune’s calls seeking comment before last night’s press deadline. However, his involvement with a Bahamian investor group seeking to acquire the Port Authority sheds some new light on his recent criticisms of that organisation, and Mr Babak in particular.
Mr Galanis had previously called for the Government to investigate Mr Babak’s appointment, hinting that it violated the ‘Bahamianisation’ policy because a foreigner had been appointed to a job Bahamians were eminently qualified for.
Other sources have questioned which other Bahamas-based enterprises would be allowed to remove such a number of highly-qualified Bahamians without any apparent protest from the Government, the Port Authority seemingly being immune from such concerns.
Yet Mr Galanis’s remarks are now in danger of being seen as ‘sour grapes’ due to his failed bid.
It is still unclear whether the St George and Hayward families are considering selling their stake in the Port Authority and numerous other Freeport-based investments.
The recent shake-up at the Port Authority, which apart from Mr Francis has also seen the departures of executive vice-president Barry Malcolm and deputy chairman Willie Moss, has been interpreted by some as the main shareholders ‘clearing the decks’ in preparation for an exit strategy.
Yet sources close to the Hayward and St George families have been told that neither is interested in selling out and exiting Freeport.
Behind the Scenes
Much interest is focused, behind the scenes, on the activities of a little-known company called Port Group Limited. This company acts as the private investment firm for the St George and Hayward families, and is the holding vehicle for their stake in the Port Authority and all other Grand Bahama-based investments.
Port Group Limited holds the families’ stakes in assets such as the Grand Bahama Development Company (Devco), Freeport Harbour Company, the Air/Sea Business Centre, and Grand Bahama Airport Company. In most of those entities, Port Group holds a 50 per cent stake. The ownership structure usually takes the form of a joint venture partnership, often with Hutchison Whampoa holding the remaining equity.
The Tribune understands that Port Group Limited is currently involved in a transaction to sell its interests in Port Lucaya Marina, and related land, to investor Preben Olsen. The deal previously involved Port Lucaya Marketplace and Port Lucaya Resorts, but has since been watered down.
Several sources have suggested that all these developments could be setting the scene for the assets owned by Port Group to be separated from the licensing and regulatory functions vested in the Port Authority.
There would, though, be questions of what any acquirer was buying, given that the Port Authority would just be the regulator, rather than an owner of ‘productive’ assets.
If it is put up for sale, several sources have suggested the best solution for the Port Authority would be for it to effectively be bought by or placed under the control of its licencees. This would introduce a high degree of self-regulation into the Freeport business community, and give companies a deeper stake in how the city is managed.
Vested Authority
The Port Authoritv is effectively vested with quasi-governmental authority, which could raise questions about whether any such entity should be sold.
It also means the Government in Nassau would take a great deal of interest in its fate should it be placed on the market.
So far, the Government has adopted a ‘hands-off’ approach to the recent executive shake-up in Freeport, unwilling to be seen to interfere with the provisions of the Hawksbill Creek Agreement.
By NEIL HARTNELL Tribune Business Editor
