WIH signed a $40 million contract with Lehman Brothers, the mortgagees of the resort, over a month ago for the purchase of the 424-acre property.
The sale includes 965 rooms between the towers and the country club, a casino and 98 timeshare units and has a targeted October 16 completion date.
WIH Attorney Jethro Miller confirmed yesterday that he formed the company a couple months ago for the specific purpose of the project and that many of the six investors are Cuban-American.
While the company did not exist in The Bahamas, Miller revealed that the investors had an existence in the United States.
The WIH attorney says the usual approvals, including government and the Foreign Investment Board (FIB), are in process.
The Grand Bahama Port Authority licence application and Central Bank approval for exchange control purposes are also pending. Property insurance is also being arranged, along with finalizing certain aspects of the property.
“We’re finalizing the various conveyances of various properties between ourselves and Lehman’s attorneys and the final straw would be payment of the balance of the purchasing price. That’s what I’m focussing on,” Miller told The Freeport News.
In the event the approvals are not in hand by October 16, Miller says there may be an accommodation, but he is hoping there is no need for an extension.
Meanwhile, WIH and the Lehman Brothers will deal with some of the more technical issues being addressed in the last few months.
“Such as who is doing what and what the final product is going to look like and also to determine how much of those buildings could be saved and whether they could be or have to be rebuilt,” he disclosed.
Regarding the contract, Miller says there are certain obligations which Lehman accepts and there is a question as to whether it is legally liable to accept any of them. But those matters are being negotiated with the government, not WIH.
For WIH, it is a simple legal transaction, he said, pointing out that Lehman, as the mortgagees are not encumbered by some of the things that were done by Driftwood, etc., the mortgagor.
The Lehman obligation would be limited to any obligation which binds the property, and Lehman and the government have reached certain accommodations regarding certain payments which the government has either already committed to making or has already made, he said.
What is not in dispute would be outstanding wages to the former employees.
“Trade accounts and other matters are not specifically items which bind the property. So if someone has a bill that is owed by the Driftwood Group, Lehman’s position is those items do not attach to them,” Miller said.
The deal between WIH and Lehman also included the two golf courses and Caribbean Utility, which is the entity that provides the treatment of sewage and waste water necessary to service the golf courses.
Bahamia Services was acquired by the Harcourt Development Group, which bought Princess Isle.
The property construction and management company based in Dublin, Ireland, was a second bidder for the resort property and a serious competitor for some time, long before WIH came to the table.
Harcourt has an obligation for the construction of the beach facility and, as was requested by government, has met with WIH on a couple of occasions.
In the interim, the WIH investors are looking into getting commitments from contractors who will be performing the construction work and trying to achieve a closer target for the opening of the casino, towers and country club.
“These are all massive, major undertakings involving several different groups within the same group, ” he said adding that the WIH investors have been in meetings here quietly on and off throughout the last month.
Miller points out, that unless one is familiar with these individuals, you would not know they are in town.
Government and the major financing source are looking at the final commitment which, frankly, the government is waiting for the bank to issue its commitment before it issues its foreign investment board approval.
He says the sheer volume of the number of issues or items that have to be addressed is something which, being compressed in a 60-day time frame, it just required a lot of application and a lot of effort by a lot of different people.
“So while I am aware of a certain element of what I call negative press, we try not to become absorbed in it, focussing more on the main issues which is to complete the purchase and get on with the next stage which should be the renovation,” he said.
Miller called the level of speculation surrounding the project unfortunate, adding that it is largely because very few people know where to go.
He also acknowledged that there hasn’t been a formal release as would normally have been done in most projects of this kind.
“I think the indication was that we were deferring that until after the completion of the purchase. So in the meantime the investigation process is what has been occupying our time and someone who was familiar with the process of conveyances would understand this ﾖ that no one goes into a property purchase involving millions and millions of dollars in a very tortured, negotiated process and all the issues surrounding this process and go through what the Americans call due diligence and we simply call investigation,” said Miller.
While he recognizes the level of interest to some extent, Miller maintains it is still a private matter and pointed out that WIH is not a public corporation.
Attaining the necessary approvals and closing a multi-million contract doesn’t happen in one day, he stressed, remarking that 90 days would have been practical.
“Even if it don’t get completed in 60 days, that does not mean that the sale is off. That simply means that there are penalty provisions which have been agreed.
“While no one likes penalty provisions, that is part of the deal.”
The reasoning behind an early completion date is because both government and WIH wanted to see the project back in operation within a relatively short time frame ﾖ seven to eight months, he said.
To-date, Miller revealed that there have not been a lessening of efforts, acknow-ledging the matter is complicated by the sheer volume associated with it and the number of issues which have to be addressed.
“We have quite a number of things that have to come together within that time frame and, looking at the clock, we basically have about 20 days to work with.
By LEDEDRA MARCHE, Senior Freeport News Reporter
