CCA Bahamas Ltd. Comments on Baha Mar Project
Nassau, The Bahamas – July 26, 2015 – CCA Bahamas Ltd. (CCA Bahamas), a wholly owned indirect subsidiary of China State Construction Engineering Corporation Limited (CSCEC) and the construction manager / general contractor for the $3.5 billion Baha Mar resort project, today issued the following statement with regard to the Baha Mar resort project:
“CCA Bahamas has continued to make every effort to work diligently and constructively with the Bahamian government, China Exim Bank, and Baha Mar Ltd., to reach a swift resolution that will enable work to restart on the Baha Mar project.
Below are key facts about CCA Bahamas’ legacy business interests in the Baha Mar resort project and its continued initiatives to reach a successful resolution:
1. We have never had any development responsibilities with respect to Baha Mar. Our role has been—and will continue to be—limited to that of a construction contractor. In an effort to resurrect Baha Mar, our Company went above and beyond the obligations of a traditional construction contractor and made a minority equity investment of $150 million (preferred shares) in Baha Mar Ltd (BML) which was indispensable to the funding of the project.
2. We have a firm, binding contract in place with Baha Mar Ltd. to serve as the construction manager/ general contractor for the Baha Mar project. BML has failed to pay us the normal monthly construction progress payments of approximately $72 million for the first five months of 2015 and has not honored our requests for additional payments of approximately $70 million for outstanding construction change orders.
3. BML is bankrupt because it repeatedly made mistakes in the development of Baha Mar. Their attempts to place blame on CCA Bahamas are self-serving explanations to deflect attention from their own negligence and mismanagement of the resort’s development. However, despite their serial missteps and purposeful avoidance of its contractual payment obligations, we are once again offering to provide financial assistance to help save Baha Mar and create thousands of jobs for the Bahamian people.
4. Completing Baha Mar is a major priority for our Company. It is the largest project of its kind in the history of the Caribbean and a national priority for the people and government of The Bahamas. To demonstrate our strong confidence in the project and further reinforce our continued commitment to completing Baha Mar, we have offered to invest an additional $100 million in BML and provide a guarantee of $175 million to China Exim Bank in connection with China Exim Bank’s new $200 million loan facility to BML.
5. To satisfy China Exim Bank’s clear requirements for a guarantee of the new loan facility, we have asked BML to provide a similar guarantee. Mr. Izmirlian has categorically rejected our reasonable request for a counter guarantee—one which would put the Baha Mar resort project back on track for completion.
6. BML has counterproductively demanded that we reduce the value of our existing equity investment ($150 million of preferred shares) in BML, to $75 million—a 50% write-down ($75 million) of our equity investment in BML and has also requested that the interest rate on our investment in BML be reduced to zero.
CCA Bahamas” expertise and historical oversight of the Baha Mar project is essential to successfully completing the resort as quickly as possible, and putting Bahamians back to work. While BML continues to be unwilling to reach a mutually beneficial agreement, our commitment to supporting the Bahamian government and the people of the Bahamas has not waned. We will continue to work closely with any and all appropriate parties to reach a viable plan in order to expeditiously open this landmark resort.”
About China State Construction Engineering Corporation & CCA Bahamas Ltd.
Established in 1985, China Construction America (CCA) is the North American and South American subsidiary of CSCEC. CSCEC is a public company listed on the Shanghai Stock Exchange with a total market capitalization of $48 billion as of June 2015. Ranked 37th among Fortune Global 500 companies in 2015 and no. 1 on the ENR Global Contractors list in 2014, CSCEC is unrivaled by any other construction company in the world.
CCA Bahamas is a wholly owned subsidiary of CCA with founding principles of integrity and innovation with quality assurance and value creation. With revenue of approximately $2 billion in 2014, CCA is the no. 32 ranked contractor in the US. In accordance with its core values, CCA is committed to creating value for all stakeholders and building a better Bahamas and a better world.
Squire Patton Boggs
Name: Michael Curto
Office Phone: 202-457-6000