Two Hong Kong businessmen, Victor How Chung Chan and Xu Han of ACE Square Investments Ltd have pulled out of their planned US$8M equity investment into the Guyana Marriott Hotel Project, sources tell Stabroek News.
Stabroek News was told that while Han had made an appearance at the official opening of the US$52M taxpayers’ Marriott Hotel in April there were already rumblings that ongoing legal action by an opposition activist, a possible change in government as well as the non-passage of the Anti-Money Laundering and Countering the Financing of Terrorism (Amendment) (AML/CFT) Bill would result in the investors stepping away.
The investors since the April opening have officially withdrawn from their commitment which would have given them 67% of the equity for their US$8m investment. The decision was made prior to the passage of the AML/CFT which was done during the second sitting of the National Assembly on Friday, June 27th, one day after the regularly scheduled sitting.
While in opposition, both APNU and the AFC had criticised the plan to trade 67% of the equity in the hotel for US$8M considering the estimated US$52m cost to build it.
Speaking to Stabroek News briefly yesterday, Minister of Finance, Winston Jordan said that he could not confirm the status of the prospective Marriott investors.
The Hong Kong duo had been identified as the investors in May, 2014 after months of delay.
In March this year it was revealed by Director of the National Industrial and Commercial Invest-ments Limited (NICIL), Winston Brassington that Ace Square Management Ltd, an affiliate company of ACE Square Investments Ltd, had pulled out of operating the planned casino at the hotel. According to Brassington, the private investor “has opted not to operate the casino due to the risk of being both joint investor (in the hotel) and operator in a casino in a country where anti-money laundering legislation is absent.” He added that the principals of ACE Square Management are also directors of publicly traded companies in Hong Kong who were hesitant to take on the responsibility of operating the casino.
At the same time, Brassington had disclosed that the government holding company had injected an additional US$16M into the project after court action halted expected funding from investors.
Brassington blamed the then opposition for the delay in the completion of the project.
He said that financing from Republic Bank of US$27 million and from the Hong Kong equity investors of US$8 million remained committed but financial disbursement had been partially delayed due to legal actions filed. Former Member of Parliament and Working People’s Alliance member Desmond Trotman had filed legal action last year opposing the passage of the mortgages from Atlantic Hotel Inc (AHI), the special purpose company set up for the Marriott Hotel, to Republic Bank.
Since the completion of the project and the opening there has been little from the government as to what the plan is moving forward although Minister of State Joseph Harmon announced last Monday that government would be making a decision on the board of AHI by the end of that day. He made it pellucid that Brassington would be removed as its Chairman. There was no official release from the government on what the decisions were and when Brassington would be let go. Prior to Harmon’s statement, President David Granger had told Stabroek News that the sources of funding for the construction of the Marriott Hotel are being examined and the government was yet to make a decision on the future role of the State in the venture.
“My information is that an investigation is being done [about] the funding for the construction of that hotel and when that is done we would make decisions about future ownership [and] the role of the state in that entity,” the Head of State had said in an interview.
As it stands, AHI currently owns 100 percent of the hotel’s equity, with NICIL investing US$36M and US$15.25M being received from Republic Bank Ltd of Trinidad.
“It has always been a condition that the injection of the equity was contingent on the conclusion of the commitments with Republic Bank for the US$27M debt financing…the injection of the US$8M by the investor group, therefore continues to be delayed, if not jeopardised as a result of the legal actions filed by the opposition,” Brassington had said in relation to ACE Square Investments Ltd’s investment prior to the company pulling out.
Stabroek News was told that the government needed to make a decision on the hotel in terms of finding an investor, shareholder or putting the entire hotel up for sale.
Jordan said yesterday that he would be speaking with Brassington and discussions were set to continue at the Cabinet level tomorrow.
