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CBA questions the 'Pennies on the Dollar' re-sale of the country’s most important private asset
  
Monday, 30 April 2012 13:01

Atlantis, the Country’s most Important privately held asset has for a second time been sold for pennies on the dollar. The Atlantis Properties with a book and market value of more than two billion dollars has been sold to Brookfield Assets a Canadian conglomerate for a fire sale price of 175 million in a debt for equity swap arrangement.

This is the second time the sale has occurred since November 2011. This time however, the only difference according to details announced is that the parties have apparently reached a deal with the other creditors who sued to stop the first sale.

The Bahamas government also announced in a televised press conference with Atlantis management, that it had approved the deal with guarantees that the work force, level of operational funding and investment will be maintained at current levels. The deal being announced just prior to the General Elections has a ring of political expediency tied to it.

More important however are the many questions not answered by the press announcements. The Council for Concerned Bahamians Abroad (CBA) has identified several important questions not publicly answered at this time;

  • What deal was cut with the other creditors?

  • What happens with the residual debt of over two billion dollars?

  • Did the government attempt to buy or otherwise control such a valuable asset at this fire sale price, and gain the opportunity which another foreign company now has, to control the largest private asset in the Country? Brookfield now has the ability to continue to manipulate the government, and simultaneously make tremendous returns on such a profitable investment.
  • Were there any possibilities for providing Private Bahamian ownership discussed or considered in the restructuring?

  • Why is it that Atlantis could not find another buyer which would offer it some better deal, is it that the Bahamas Tourism business is seen as such a faltering proposition by players in the resort, tourism and investment industries that they would not take a chance even at pennies on the dollar?

  • Where do the Chinese fit into the picture? As some have queried previously, are the Chinese playing any role, and are they destined to eventually own Atlantis under the current circumstances?

Finally, why did the government not step in and utilize this second chance opportunity to insist on a restructuring that would advance the process of building a Capital Market Driven Economy (CMDE)? A CMDE as previously proposed by the Council for Concerned Bahamians Abroad (CBA), is a high priority objective, preferenced by the Inter-American Development Bank (IADB), and International Monetary Fund (IMF) polices. Restructuring major assets within the economy affords prime opportunities to implement a CMDE which do not come along often.

These are all important questions surrounding what appears to experienced investors and outside observers a truly bizarre situation. Could this be another building debacle for the Bahamas and its people?

Further information on this topic can be viewed at The Council for Concerned Bahamians (CBA) online hub at www.ourbahamas.org.


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