Nassau, The Bahamas – With the recent proposals of the acquisition of Atlantis by one of its lenders, employment security in the tourism sector has Prime Minister Hubert Ingraham committed to leadership that protects Bahamian workers.
“We continue to monitor events and assist where appropriate and helpful. Our overriding responsibility is for the protection of Bahamian jobs and the long- term viability of Atlantis,” Mr. Ingraham told an audience on January 19.
“It is one of the leading resorts in the Caribbean, if not the leading one. It has been good for The Bahamas and it has a good future,” said the prime minister.
The Prime Minister told the gathering at the political headquarters of Environment Minister Earl Deveaux that this is a time for caution and restraint, clear thinking and calm heads. He said he believes it appropriate to recall that when Atlantis came, those opposed to it were so incensed, they threatened to change the agreement at the most convenient opportunity.
He said it would be inappropriate to comment on the matter day in and out and seek to conduct the public’s business in public view. He reminded that the hotel industry failed prior to 1992, when the Bahamas Government was burdened by the rising debt of its investment in hotel ownership.
“When we came into office in 1992, we found the two major resorts in The Bahamas, Paradise Island Resorts International was in bankruptcy and the Cable Beach properties were on the market for sale. And the Government of The Bahamas owned 20 percent of all the hotels in The Bahamas and was losing money every day. We worked very hard to transform Paradise Island with Sol Kerzner. He’s been good for us and good for The Bahamas,” said Prime Minister Ingraham.
“…In 2006, Atlantis decided, Kerzner International decided, it wanted to borrow lots of money; billions of dollars. It did put up Phase Three in Nassau, in Paradise Island, but it also used much of that money to invest outside The Bahamas. And it put up as security for the loan, Atlantis and the Paradise Island properties. That was a very bad decision because while Atlantis / Paradise Island could support and pay for all of the monies borrowed for it. It cannot pay for what’s happening in Dubai, Mexico and elsewhere,” said Mr. Ingraham.
Mr. Ingraham revealed that the Atlantis loan was a short-term loan with outrageous terms of paying off $2.5 Billion in five years, which is not possible for Atlantis to meet. He drew an analogy by comparing the multi-national corporate loan to an average mortgage commitment.
“We all know we have to get 20 and 25 year to 30 year mortgages to pay for our houses. But it was expected at the time, they would be able to get somebody else or another set of lenders to lend them money to pay off the first set of lenders. That is not to be,” said Prime Minister Ingraham.
“There were seven lenders, who lent them money, $2.3 billion, and when they couldn’t make the payment and they couldn’t pay, the lenders decided to take action. There was nothing the government could do about a bank that lends you money and you don’t pay them back. They will put your building up for it and the bank owns it to sell it.”
Prime Minister Ingraham explained that the bank and the lenders have an interest in making sure they can get their money back from Atlantis, so it is in their interest to make sure Atlantis succeeds and makes a profit so they can eventually get a return on their investment.
“So, it makes good sense for them not to fire people at Atlantis, but instead to keep up with them and try to make as much money as they can at Atlantis. That is exactly what they are seeking to do,” said Prime Minister Ingraham.
“Have no fear. No jobs are being lost. The owners are coming to terms amongst themselves. In the meantime, until something happens between the lenders, Mr. Kerzner still owns Atlantis. He’s still running Atlantis. We were happy with him last year. We are happy with him today.”
Prime Minister Ingraham told the public to “pay no mind” to vicious rumours that have no financial or economic documentation to validate its foundation.
“And so I say to you, pay no mind to them, pay no attention to them. We have your back. We have your best interest at heart and we are connected, we are involved, we are engaged and you can put your trust in us,” said the prime minister.
By Gena Gibbs
BAHAMAS INFORMATION SERVICES
