Dubbed the most competitive bid in government’s effort to execute the sale of the Guyana Marriott Hotel in Kingston, the National Industrial & Commercial Investments Limited (NICIL) and the bidder X, LLC will soon enter into discussions to finalise the deal.
Vice President Bharrat Jagdeo yesterday announc-ed during a press conference that government has given NICIL the go-ahead to engage the company to facilitate the sale.
“NICIL has completed that evaluation. They have ranked the firm that had a bid of US$90 million as the highest bid, the number one bid and they have been given the authority to engage in negotiations with that company,” Jagdeo disclosed at the press conference at the Office of the President.
American entrepreneur, Ramy El-Batrawi, founder of investment group X, LLC, upped his bid by US$25 million from his initial offer in the second round of bidding.
Responding to the concern that El-Batrawi had faces charges in the USA from the Securities Exchange Council, Jagdeo said that it was in the past and the potential buyer has the support of the US government.
Integrated Management Group Guyana Inc, another company, also expressed interest in purchasing the hotel and submitted a tender of US$86.1 million – US$31.1 million above its previous offer.
The Government of Guyana had publicly rejected the first round of bids. It held the view that all six bids submitted for NICIL’s shares in Atlantic Hotel Incorporated (AHI) for the acquisition of the Guyana Marriott Hotel came in at a figure that was not acceptable. X, LLC in the previous round of bidding had tendered the highest bid at US$65 million while Integrated Manage-ment Group – which runs the Palm Court – bid US$55 million.
On May 2, the six bidders were contacted and advised their submitted bids had been rejected, NICIL reported at the end of the second round of bids. At that point, the six bidders were invited to resubmit new bids with a minimum bid price of no less than US$85 million. The deadline for submission was on May 16.
The public was not told of the request to bidders to submit new bids and no official announcement was made on the fate of the bids. In the invitation for new bids, NICIL provided a listing of assets, liabilities, and payables, and explained what was expected in each category on the sale of the hotel. It listed cash on hand and at the bank as $4.6 billion. A subordinated loan was listed as $3 billion and deferred income at $3.2 billion. The related parties’ liability due to the parent company was $4.4 billion.
NICIL stated that cash on hand and at the bank will be used to settle working capital advances of $95.3 million due to the parent company of the hotel and an amount due to SCG International (Trini-dad and Tobago Limited) of $261.1 million 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.
The related parties liability due to the parent company, NICIL explain-ed, 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.
NICIL said all bidders were invited to attend the bid opening at 14.00 hours on May 16, in NICIL’s boardroom. At the bid opening, representatives of one bidder was physically present, while a representative of the other company attended virtually via Zoom. R K Sharma, Arianne McLean, and Naresh Balkaran, manager of Internal Audit and Risk Management of NICIL, were present at the bid opening.
The tender box was opened in the presence of all present and there were two bids. They were opened and read aloud. The bidders and their respective bids were recorded, signed, and acknowledged by the bidders who were present, as well as the representatives of NICIL, the agency said.
Numerous questions were raised on April 27 when 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$65 million.
Jagdeo had 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.
“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,” the vice-president was quoted as saying.
According to the X LLC website, the group’s primary focus is to invest in and enhance target industries. El-Batrawi was described as a highly accomplished entrepreneur offering 35 years of experience in spearheading substantial business transactions, both nationally and on a global scale.
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.
