In 2017, the APNU+AFC government saved the Guyana Marriott Hotel from being acquired by Republic Bank Limited (RBL) of Trinidad after a loan default and the inability of NICIL to assist, former Minister of Finance Winston Jordan says.
In a letter to Stabroek News (SN) which appears in today’s edition, Jordan addressed a number of matters that were raised in a news item in the last Sunday Stabroek on the Kingston Marriott hotel.
Noting that the news item had raised questions about whether the Marriott Hotel had been able to restart payments on its RBL loan due since 2017, Jordan expressed surprise.
“I must admit that I was very surprised that the writer seemed unaware of the developments in that matter, since it was covered by SN, among other media. Briefly, in 2017, AHI (Atlantic Hotel Inc) defaulted on its payment of the RBL loan and requested the assistance of NICIL, the guarantor. Unable to assist, NICIL turned to the government for assistance. The Coalition government stepped in and saved the hotel from being acquired by RBL. The loan was removed from the books of AHI and taken to the books of Central Government, to be serviced as a direct charge on the Consolidated Fund. The loan of US$17,306,964.12 was restructured on the following terms: period extended from 13 years to 15 years, interest rate lowered from 8.6527% to 6.28%. This resulted in lower annual payments of US$463,791.04 and an overall saving of US$173,261.96. The new agreement was tabled in Parliament in 2017”, he wrote.
While Jordan had in 2017 stated to the media that government had taken over the servicing of the loan there was no disclosure that there had been a formal default by Marriott’s parent company, AHI and that acquisition by RBL had almost occurred.
On the question of the viability of the hotel’s operations, Jordan said that in the absence of audited accounts it was unclear whether the Guyana Marriott had been able to turn a profit. He however said that with the removal of the RBL loan from the hotel’s books and higher occupancy the situation had been ameliorated and at the time of the board’s replacement in August 2020 AHI had cash in excess of $1b on hand.
“First, in the absence of audited accounts, it is unclear whether the hotel has been able to turn a profit. As I indicated in 2017, profitability was heavily dependent on a functioning and profitable Entertainment Complex, inclusive of a casino. The continued absence of the Complex makes it doubtful that the hotel is profitable. On the positive side, however, the 80% average occupancy of the hotel and the removal of the Republic Bank Limited (RBL) loan from among its liabilities would have mitigated the losses. At the time of the Board’s replacement, in August 2020, AHI had cash in hand in excess of $1 billion”, he stated.
Jordan also contended that every effort was made to have the accounts for the years 2015-2019 audited, in spite of a host of challenges.
“Neither the Board of AHI nor the Coalition government can be blamed for the audited accounts remaining outstanding and being presented to Parliament. Indeed, problems and difficulties seem to persist, since the audited accounts for the years post August 2, 2020 are still outstanding”, he said.
The inability of the Guyana Marriott Hotel to service the RBL loan of US$15.25m apart from the recovery of the state financing used in its construction would call into question the assumptions under the Jagdeo administration that led to the controversial project taking off.
The hotel opened on April 16th 2015.
