After the quashing of tendering in April for the sale of the Marriott Hotel Guyana, state holding company, NICIL has asked the original participants to resubmit bids and has set a base price of US$85m.
There was no word to the public by the National Industrial and Commercial Investments Limited (NICIL) on this new invitation and according to documents seen by the Sunday Stabroek, Tuesday, May 16, 2023 has been set as the deadline for the submission of the new bids.
Numerous questions were raised on April 27 when Vice President Bharrat Jagdeo announced at a press conference that the hotel will remain under the government’s control for now as it will not be moving ahead with its sale given that the highest bid to purchase the hotel was only US$65m.
Jagdeo said that they were only testing the market when they went to tender, stressing that they will keep control of the hotel until they are able to attract a bid which reflects the real value of the hotel and its capacity to earn.
He stated, “When we went out to tender we were testing the market… We believe in the government that none of the bids meet our price expectations and therefore we will not proceed with any of those bids.”
No official announcement was made by NICIL on the fate of the tendering but on May 2nd, it wrote to the bidders inviting them to resubmit bids for its shares in Atlantic Hotel Inc which is the parent company of the hotel.
NICIL provided a listing of assets, liabilities and payables and explained what was expected in each category on the sale of the hotel. It added that “Bids below USD85 Million will automatically be rejected”.
It listed cash on hand and at the bank as $4.6b. A subordinated loan was listed as $3b and deferred income at $3.2b. The related parties liability due to the parent company was $4.4b.
NICIL said that cash on hand and at the bank will be used to settle working capital advances of $95.3m due to the parent company of the hotel and an amount due to SCG International (Trinidad and Tobago Limited) of $261.1m as construction costs. The cash and bank balance after the settlement of these liabilities will remain with the company for the benefit of the company after the sale and transfer of the shares.
NICIL said that the related parties liability due to the parent company will remain with the company for settlement by the company after the sale and transfer of shares. The subordinated loan will also be assumed by the parent company.
In the April tendering round, American businessman and entrepreneur Ramy El-Batrawi, founder of investment group X, LLC tendered the highest bid for the hotel of US$65m.
Guyanese hotelier, Robert Badal tendered the second-highest bid of US$55.5 million for the purchase of the state-owned Kingston hotel.
Chief Executive Officer of NICIL, RK Sharma, in a statement issued following the opening of the tenders, had named the bidders as Georgetown Investments and Management Services Inc (Mustafa Eray Kanmaz), X LLC (Ramy El- Batrawi), Muneshwers Limited (Amarnath Muneshwer), Integrated Group Guyana Inc. (Ravindra Prashad) and NCB Capital Markets (Steve Gooding).
NCB Capital Markets of Jamaica, the wealth and asset management arm of the National Commercial Bank submitted a US$33 million bid while Integrated Management Group and Georgetown Investments and Management Services, which currently operates the Princess Hotel Casino, tendered bids amounting to US$55 million and US$50 million respectively. Muneshwers Limited tendered a bid of US$25 million.
Last year, NICIL had issued a ‘Pre-qualification Notice’ seeking Expressions of Interest (EOIs) from persons or companies, individually or as part of a joint venture/consortium, with an interest in purchasing its shares in AHI for the acquisition of the Guyana Marriott Hotel.
The closing date for EOIs was 10th January 2023 at 2:00 pm. Applications for pre-qualification were to include the following: financial capability in terms of net worth, audited financial statements for the last three financial years, net worth of a minimum of US$250m, and a letter of financial capability from a recognized financial institution to acquire NICIL’s shares in Atlantic Hotel Inc (AHI) for the Guyana Marriott Hotel. AHI was incorporated on 10th September 2009, as a special-purpose company to construct and manage the establishment.
Controversially built by taxpayers’ money and a loan, the hotel was opened on April 16, 2015 but was not able to service its loan. It was also reported that the hotel benefitted substantially from an accommodation deal struck with oil companies operating in Guyana.
