Construction of the long-stalled US$51M Marriott Hotel in Kingston is scheduled to start next month but government is still seeking one or more participants who will collectively own 67% of the project’s equity amounting to US$8M.
In an ad in yesterday’s Sunday Chronicle, the government through its special purpose company for the project, Atlantic Hotel Inc (AHI), issued a final call for expressions of interest (EOI) to participate in the Marriott hotel project private equity. The ad said that while AHI is in receipt of a number of EOIs from private investors to participate in the equity, the company is seeking to finalize the selection of one or more participants who will collectively own 67% of AHI’s equity with a total subscription value of US$8M. Collectively, the total common equity of AHI will total US$12M and the government vial NICIL, will be a minority partner owning 33% of AHI’s equity amounting to US$4M.
Overall, government will provide 1/3 of the project funding with the balance in subordinate loan stock. Republic Bank will provide US$27M of senior debt to the project.
The ad said that the project is in the advanced stages of development with construction scheduled to start in February. The EOIs should be submitted no later than February 25.
Last November during the sod turning ceremony for the long-awaited and controversial Marriott hotel, it was disclosed that Chinese company, Shanghai Construction Group will be constructing the US$51M edifice.
The government has struggled to find financing for this project which has been on the agenda for many years and the revelation earlier last year that some of the money would be provided by the state has been heavily criticized as members of the public have argued that the investor should be bearing the full cost of construction.
Giving a brief background on the project, Head of the Privatisation Unit, Winston Brassington had said that the estimated cost of this project is in excess of U$S51M. He had stated that the Government of Guyana will provide a minority share of the funding while the majority of private debt financing will come from Republic Bank who will provide US$27M in senior debt.
This project, Brassington had said, covers the delivery of a 197-room Marriott hotel, a large ballroom, a conference centre, along with other amenities. It also includes an entertainment complex of a casino, nightclub and a restaurant.
He recalled that this hotel project was under consideration since 2004 and in 2009, when the Zublin group out of Grenada, a private developer withdrew after citing the global financial crisis. The government, he said, thereafter continued to pursue this project following a public/private partnership. Resulting from invitations in the media, a proposal was made which included designing the hotel. This proposal was accepted in May 2009.
To execute this public-private partnership, Atlantic Hotel Inc., a special purpose company was formed and in December 2009, the letter was executed between Atlantic Hotel Inc. and Marriott.
On November 16, 2010, following approval by Marriott of the revised conceptual design, the design bill contract was executed to Shanghai Construction Group and Atlantic Hotel Inc. for the value of US$50.9M.
