01022018 business

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TUESDAY, JANUARY 2, 2018

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‘Stars aligning’ for 2018 tourism surge

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net

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Cabinet minister says the “stars are aligning” for a Bahamian tourism surge in 2018, with the Government “100 per cent behind” Baha Mar’s full opening.

Dionisio D’Aguilar, minister of tourism, told Tribune Business he was “very optimistic” on the Bahamas’ growth prospects as a result of Baha Mar’s completion, the return of previously-closed room inventory and the potential Grand Lucayan sale.

Speaking just before Sarkis Izmirlian filed his $2.25 billion damages claim against Baha Mar’s main contractor, Mr D’Aguilar said the $4.2 billion development’s previous woes were now “water under the bridge” and the Bahamas needed to instead focus on making it a success.

He could not, though, resist a dig at the former Christie administration, arguing that while it “liked to claim credit” for rescuing the project it had left “$2

* Minister: Gov’t ‘100% behind’ Baha Mar * ‘Anxious’ for full opening and 2,000 jobs * Project’s woes ‘water under bridge now’ billion on the table” that could have boosted Bahamian jobs and the economy.

But Mr D’Aguilar, a former Baha Mar Board member under Mr Izmirlian’s ownership, said he was “very encouraged” about the prospects for the Bahamas’ main industry provided this nation escaped a major hurricane - something he described as “a big if” based on recent storm seasons.

“I’m very optimistic for 2018,” the Minister told Tribune Business, while declining to give a percentage growth estimate. “I think all the stars are beginning to align.

“We have Baha Mar coming on stream and kicking in. The Coral Towers [at Atlantis] has come back on stream, and the RIU. We have a number of properties that were closed for renovations coming back

MINISTER of Tourism Dionisio D’Aguilar. into operation, and there’s keen interest in investing in the Family Islands based on projects coming across our table and getting approved.”

The Ministry of Tourism recently announced that booking numbers for the period November 2017 to January 2018 were ahead of prior year comparatives

by 16.6 per cent, although Bahamas Hotel and Tourism Association (BHTA) data showed that room revenues for the first 10 months of the year were off 7 per cent, with both occupancy levels and rates down.

“In 2016, we had depressed arrival numbers due to the hurricane,” Mr

D’Aguilar said. “This year [2017] we had a better outlook, and the numbers returned to normal.

We also got a bump from other areas in the Caribbean being damaged, and persons looking for alternative places to come, with the Bahamas ranking fairly high.

“I think we’re scoring very highly in all the rankings of the travel industry. We just have to stay focused on our marketing, and continue to put valuable marketing resources into online and engines that travellers are increasingly using to book.

“Barring any hurricanes or weather-related disasters, and that’s a big ‘if’, I’m very encouraged. March is looking better than last year because of where Easter falls.”

Mr D’Aguilar said Freeport, where the Grand Lucayan’s closure had taken over 1,000 rooms, or 59 per cent of the island’s total inventory, out of service, had been “the drag on our numbers” in 2017.

SEE PAGE 4

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$750M BOND ‘PROLONGS SAVERS’ PUNISHMENT’ * EX-FINANCE MINISTER’S RATE ‘SUPPRESSION’ FEAR * ARTIFICIAL BOOST FOR RESERVES, BANK LIQUIDITY * LIKE ‘QUANTITATIVE EASING WE DON’T NEED’

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net THE Government has “prolonged the punishment of savers” through its recent $750 million bond issue, a former finance minister has warned, as the effects work through the monetary system.

James Smith, also a former Central Bank governor, said the impact of the Minnis administration’s foreign currency borrowing would be to further “suppress” already-low deposit rates in the banking system.

He added that data in the Central Bank’s monthly report for November showed that Bahamian savers, both institutions and investors, needed to brace for a

SEE PAGE 5

CCA ‘went backwards’ FRANCHISE GROUP’S $3.1M on building Baha Mar EXPANSION ADDS 90 JOBS

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net BAHA Mar’s contractor “could not keep straight” reports on its construction progress, with completion of specific work elements allegedly “regressing” on a monthly basis.

Sarkis Izmirlian, the $4.2 billion project’s original developer, is citing numerous alleged incidents where China Construction America’s (CCA) monthly reports suggested construction progress had gone backwards - something that should be impossible on any building project.

* SARKIS: THEY ‘COULDN’T KEEP STRAIGHT’ PROGRESS REPORTS * CITES CASE OF UNEXPLAINED ‘COMPLETION REGRESSION’ * AND REVEALS TWO ‘STOP WORK’ ORDERS BY FORMER GOV’T His $2.25 billion damages lawsuit, filed in the New York State Supreme Court on Boxing Day, picked out CCA’s October 13, 2013, ‘monthly report’ as an example of the alleged “false and misleading statements” designed to mislead himself - and Baha

Mar executives - about the extent of construction progress.

“CCA could not even keep straight the extent to which MEP (mechanical, engineering and plumbing) work had been completed

SEE PAGE 6

By NATARIO MCKENZIE Tribune Business Reporter nmckenzie @tibunmedia.net A PROMINENT Bahamian franchise group has invested $3.1 million in opening its latest Marco’s Pizza and Popeyes restaurants on Robinson Road, a move that has created 90 jobs.

Aetos Holdings, which is owned by the Tsavoussis brothers, Chris and Terry, has taken its number of Marco’s Pizza and Popeyes outlets to six and three, respectively, with the latest openings. The group also operates the

* AETOS HOLDINGS IN NEW MARCO’S, POPEYES SITES * ROBINSON RD MARKS SIXTH AND THIRD SITES Wendy’s franchise. “There are 50 employees at Popeyes. Marco’s is our sixth one in the Bahamas, and that employs 40 people, so that’s 90 jobs between those two restaurants,” said Terry Tsavoussis.

“With Popeyes it’s a kitchen-only concept; no dining room. It has a walkup window and a Y-lane drive-through similar to the Wendy’s on Carmichael

Road. We have got the exact same thing at Marco’s, which is quite unique.

There is no Marco’s Pizza restaurant like that in the world. It’s just a walk-up window and there is the delivery option. It can accommodate walk-ups and carry-outs, as well as delivery within a three-mile radius of that location.”

SEE PAGE 2

QC: ‘Opening for compromise’ on Grand Bahama Power deal

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net A PROMINENT QC believes there is “an opening for compromise” over the $35 million Grand Bahama Power Company buy-out that would serve all parties’ interests.

Fred Smith QC, the Callenders & Co attorney and partner, reiterated his call for Emera to give Bahamian minority investors the option of direct ownership in GB Power in exchange for their current shares in BISX-listed ICD Utilities.

He argued that this would make it easier for the Government to approve the transaction, while also “respecting” the objectives of all Bahamian shareholders in ICD Utilities

* AGAIN URGES DIRECT BAHAMIAN OWNERSHIP * ARGUES EASIER FOR GOV’T TO APPROVE * BAHAMIAN OWNERSHIP ‘TAKEN BACKWARD’

FRED SMITH regardless of whether they wish to cash-out or retain an indirect equity interest in GB Power.

Referring to Emera, Mr Smith told Tribune Business: “There is an opening here for them to compromise so the Government can grant approval conditional on those who do not wish to sell getting ordinary shares with direct ownership in a Bahamian utility asset.

“That is the very simplest solution. That way, the financial objectives of those who wish to sell-out are respected; the Government is not standing in the way; and those that don’t wish to sell and maintain an investment in their

community’s future can have their shares.”

There is little sign to-date that his rationale is shared

by Emera, the Canadianheadquartered utility that owns 80.36 per cent of GB Power. Archibald Collins, the latter’s president and chief executive, previously told Tribune Business that while permitting the 19.67 per cent Bahamian minority to exchange their ICD Utilities shares for GB Power shares was an option, it was never considered when structuring the buy-out.

SEE PAGE 4

PAGE 2, Tuesday, January 2, 2018

THE TRIBUNE

REALTORS BID TO ‘TIGHTEN UP’ KEY INDUSTRY LAWS

By NATARIO MCKENZIE Tribune Business Reporter nmckenzie@tribunemedia.net THE Bahamas Real Estate Association (BREA) is pushing to “tighten up” the Real Estate Act, its president acknowledging that one of the proposed changes would address the “illegal” practice of nonBahamians selling local real estate.

Christine Wallace-Whitfield told Tribune Business: “We want to get our Real Estate Act done and before Parliament in 2018. It’s time to cross all the ‘t’s’ and dot all of the ‘i’s’. We have been in conversations with the Attorney General on that.

There are things in there we are really trying to tighten up. The Act hasn’t been touched in 17 years.”

The Real Estate (Brokers and Salesmen) Act 1995 was last amended in 2000, and ensuring ethical standards within the profession and tackling the sale of real estate by non-Bahamians re among the issues BREA is seeking to have addressed.

“We have to make sure persons looking to practice real estate do not act in an unethical manner,” said Mrs Wallace-Whitfield.

“We also have to protect Bahamians in the industry.

* TARGETING ILLEGAL SALES BY FOREIGNERS * AG TELLS BREA HE ‘HAS THEIR BACK’ * SEEKING HELP FROM FLORIDA CHAPTER There are persons sending us e-mails saying that they see someone in the country practicing real estate illegally.

“Real estate is reserved for Bahamians with the right to work. It just really irks me when I hear someone is here selling real estate, bringing their people here and not going through a licensed real estate firm in the country.”

BREA currently has 724 members, and Mrs Wallace-Whitfield added: “We are trying to work with the Florida Chapter. We Just started conversations with them to tighten that up. If one of their agents come down without contacting a Bahamian-licensed realtor, we can report them to Florida.

“There are a lot of people slipping through the cracks.

The Attorney General has our back, and has encouraged us to report such matters to the Immigration Department. It’s a very frustrating issue.”

Franchise group’s $3.1m expansion adds 90 jobs FROM PAGE 1 Terry Tsavoussis said the total investment involved in purchasing the property, and subsequent build-out of the two restaurants, was $3.1 million.

“We have been open over a week at Marco’s, and it’s holding similar numbers to our other locations. We are very pleased about that. Popeyes is doing the exact same thing. With Popeyes, it’s usually about 40 per cent dine-in and 60 per cent drive-through.

With the new Popeyes location it’s about 40 per cent walk-up window and 60 per cent drive-through,” said Terry Tsavoussis.

He added: “Carmichael is our busiest restaurant, but

Prince Charles and Robinson Road are pretty much on par. We’re just coming out of the first week and we don’t know how it will play out, but Robinson Road could surpass the other restaurants.

“Robinson Road is a very densely-populated area.

We are very pleased with the initial results, but it could surpass what we are doing with any of our other locations.”

Fast food franchises continue to be a growth area for the Bahamian economy, despite the recent Carl’s Jr closure. Bahamian entrepreneur, John Wilson, recently unveiled plans to bring the Papa John’s pizza franchise back to this nation, creating 100 jobs in the process.

THE TRIBUNE

Tuesday, January 2, 2018, PAGE 3

Contractors urge ‘clarity’ on Pointe involvement

By NATARIO MCKENZIE Tribune Business Reporter nmckenzie@tribunemdia.net

THE Bahamian Contractors Association (BCA) is demanding the Government and developer “clarify” how many Bahamian companies and labourers are employed on Phase II of The Pointe project.

Leonard Sands, the BCA president, told Tribune Business that while “the project seems to be progressing well”, Bahamian contractors wanted to know what level of involvement they could expect at the site next to downtown Nassau’s British Colonial Hilton.

The Pointe’s developer is China Construction America (CCA), Baha Mar’s controversial main contractor and the Hilton’s owner, and Mr Sands expressed concern that local contractors and skilled tradespersons were missing out on work they were qualified to perform.

“Even during the holiday period they appear to be engaged in aggressive construction,” the BCA president said of The Pointe. “While I’m happy with the work going on, we would want to know what is the involvement of Bahamian contractors this time around.

“The BCA right now wants to know how this multi-million project is going to be constructed and completed, and how Bahamian workers will be a part of this. We are asking for clarity. I know there were a lot of Chinese workers on the ground. I would like to know what’s going to happen as they get into vertical construction, pouring concrete and laying blocks;

* FEAR BAHAMIAN FIRMS, WORKERS MISSING OUT that is something a large portion of our workforce is very skilled at.”

The Heads of Agreement for the project, tabled in Parliament last year, granted CCA between 400500 work permits for the $200 million development.

The deal, dated June 18, 2015, stipulated that Bahamians would comprise 70 per cent of the total construction workforce, once those employed by local sub-contractors were included in the calculation.

And Bahamian sub-contractors were supposed to receive “approximately 40 per cent of development work.... in various classifications”, although these were not listed.

Chinese labour and materials typically go wherever Beijing and its investments are in the world, meaning that The Pointe model is little different from their government’s norm.

“It is understood and agreed that the workforce employed by the Bahamian sub-contractors are part of the overall Bahamian to non-Bahamian labour ratio, and Bahamians will represent 70 per cent of the total labour requirement for the development,” the Heads of Agreement state.

“The parties may, through mutual agreement, vary their employment ratio if it becomes necessary for earlier completion.”

The 70 per cent ‘Bahamian labour component’ is thus subject to alteration but, based on the 400-500 Chinese work permits, this implies around 800-1,000 construction jobs for Bahamians.

The Heads of Agreement also committed CCA to

“make every effort to fill as many jobs as possible with Bahamian citizens”. However, it then added: “The Government recognises, however, that due to the development of the proposed high-rise structures and the tight schedule to complete the development, non-Bahamian labour with special skills and expertise that are not readily available in the Bahamas will be required.

“To this end, the Government agrees to facilitate the grant of between 400 and 500 work permits to qualified persons on a short-term or longer basis, depending on the job classification and the ability of [CCA] to find and/or train suitable candidates for such jobs.”

The Pointe’s director of external affairs, Leslie Pindling, previously told this newspaper that the Heads of Agreement stipulated that there be a ratio of 60 per cent Chinese workers to 40 per cent Bahamians, but only during the development’s superstructure phase or start-up construction.

When this is completed – foundation work for the already-completed eightstorey, 1,000-car garage, condominium and entertainment hotels – more Bahamians will be needed to do the finish work. This includes electrical, plumbing and dry wall work.

Mr Pindling also confirmed late last year that Phase II is expected to be completed by end-2018.

This includes development of a 100-room, eight-storey condominium complex with oceanfront residences and a marina. The first phase was centred on the multi-storey

PHASE II of The Pointe project, next to downtown Nassau’s British Colonial Hilton. parking garage, which now dominates the entrance to downtown Nassau on West Bay Street.

Mr Sands, meanwhile, also urged the full enactment of the Contractor’s Act to regulate the industry, and allow Bahamian contractors to take full

advantage of the various projects coming on stream this year.

He told Tribune Business: “There are a number of projects in the pipeline, and from a Bahamian contractor’s standpoint it is going to be a good year for construction.

“But the necessary management of the industry has to happen through the full enactment of the Contractors Act. It’s not wise to continue the status quo. We need a regulated industry if we are going to take full advantage of all the developments in the pipeline.”

PAGE 4, Tuesday, January 2, 2018

THE TRIBUNE

QC: ‘Opening for compromise’ on Grand Bahama Power deal FROM PAGE 1 Emera’s stated goal is to simplify GB Power’s corporate ownership structure by taking out BISX-listed ICD Utilities, the holding vehicle for a 50 per cent in Grand Bahama’s utility monopoly, and de-list it from the exchange. Apart from an all-cash pay-out, Bahamian investors can also elect to retain their indirect GB Power ownership by swapping their ICD Utilities shares for Emera Depository Receipts (BDRs). The latter will be listed on BISX, and these securities will potentially diversify/minimise risk for Bahamian investors since returns will be generated from all Emera’s Canadian, US and Caribbean assets - not just GB Power.

Anthony Ferguson, president of CFAL, the Bahamian investment house that advised Emera/ ICD Utilities on the buy-out, previously said the Depository Receipts held the promise of regular dividends for local investors notwithstanding the 25 per cent Canadian withholding tax that will be imposed. He pointed out that, under the current corporate

structure, Bahamian shareholders had not received a dividend in seven years. But, despite 96 per cent of minority Bahamian investors voting in favour of the buy-out, the Government has delayed final approval of the deal until it finishes a review set to be concluded by January 31, 2018.

Carl Bethel QC, the Attorney General, subsequently told this newspaper that the Minnis administration wanted to be sure that approving the Emera purchase is “consistent” with previous policy decisions taken when the Canadian utility first bought into GB Power.

While the delay has proven unpopular with ICD Utilities shareholders whose Christmas spending relied on receiving their payouts, others have revealed they are “totally happy” about the delay and government review.

Pastor Eddie Victor, head of the Coalition of Concerned Citizens (CCC), and a vocal GB Power critic, told Tribune Business that approving the buy-out will “take Bahamian ownership backwards” when it comes to

this nation’s utilities and major investments.

“We are confident that the Government is going to take the necessary positions to protect Bahamian ownership in vital utilities like GB Power,” he said.

“It would stop what could become a precedent for the country when we need to be working towards getting more Bahamian ownership in utilities and large investments.

“If we go ahead and let Emera purchase all the shares, we’re taking Bahamian ownership in such companies backwards..”

Pastor Victor argued that the GB Power buy-out, if ultimately allowed to proceed as is, would also contradict the Free National Movement’s (FNM) energy sector campaign manifesto, where it promised to privatise Bahamas Power & Light (BPL) but retain majority local ownership.

“This situation has brought the Government to take another look at it,” he added, “because there is a policy that must be established for the country; ensuring that Bahamian ownership remains in GB Power and

any power company throughout the Bahamas. “I believe foreign direct investment in our country is necessary, but I also believe we have to have Bahamian ownership participation. That way, many Bahamian citizens have the opportunity to share in the profits being made, and those profits will stay in the country and not be sent outside. “It would help to have more Bahamians as owners with interests in these companies.

We’re really happy about that [the Government’s review], and it also says to Emera that you can’t come into a country like ours and create a situation where people who may not want to sell are forced to sell.”

Pastor Victor’s comments show that the Emera Depository Receipts (DR) are not equated with indirect ownership in GB Power by many, even though they will be a direct replacement for the ICD Utilities shares. The DR option, Emera and its advisers are arguing, also means that Bahamian investors are not being forced to sell. And, while Emera and GB Power have repeatedly denied there is any ‘hidden

agenda’ behind the buy-out, Pastor Victor again urged Bahamians to retain their shares as they are “worth much more than Emera is telling”.

He added: “If Emera wants those shares they must be valuable, and if shareholders hold them a while longer they can get a higher price. I believe it is more valuable than what they are telling us.”

Mr Smith, meanwhile, expressed concerns that the buy-out - and de-listing of ICD Utilities - would mean that GB Power’s annual financial statements no longer have to be disclosed, resulting in the utility becoming less accountable and transparent to shareholders and customers alike. “Why should Bahamians receive less transparency with a power company in the Bahamas than Canadians have with a power company in Canada?” he asked. “What’s good for the Bahamian goose is good for the Canadian gander.

“It’s the Bahamian goose laying the golden eggs that the Canadians want, and which Bahamians wish to retain at least a part of.”

‘Stars aligning’ for 2018 tourism surge FROM PAGE 1 While the Toronto-based Wynn Group has reached the Letter of Intent (LOI) stage with the Grand Lucayan’s owners for a second time, no purchase has yet been concluded.

Should a deal be consummated, Mr D’Aguilar said he did not expect a renovated and reopened resort “to fully kick-in until 2019”.

The Minister of Tourism, meanwhile, reiterated the Government’s “anxiety” for Baha Mar to fully open, given its importance to GDP growth, job creation and increased hotel room inventory in both the short and long-term.

There was little to no official government reaction to

Chow Tai Fook Enterprises (CTFE) recent confirmation that it had closed its acquisition of Baha Mar, but Mr D’Aguilar said the presence of himself, the Prime Minister and other senior officials at related events and openings “demonstrated” the administration’s support for the property and its new owner.

Dr Hubert Minnis, while in Opposition, had said his government would find a ‘real buyer’ for Baha Mar if no transaction was closed, but Mr D’Aguilar told Tribune Business: “The Government is 100 per cent behind getting Baha Mar open, and supporting Bahamian employment and economic activity happening in this economy.

“We continue to be very anxious to get it open and operational as soon as possible to get the employment bump, and spur the creation of jobs. They’re an integral component of the economy, vacation experience, and the number of new rooms they’re putting into the market should expand GDP.” Baha Mar should increase the Bahamas’ total hotel room inventory by 2,100 when its final property, the Rosewood, opens in March/ April 2018. The $4.2 billion project, though, continues to be a ‘political football’ with the Government and now-Opposition having ‘swapped sides’ since Mr Izmirlian’s ouster.

The former developer’s latest lawsuit against China

Construction America (CCA) has reawakened the controversy over the project’s handling, at least as far as the former Christie administration is concerned, with its former Cabinet Ministers jumping to a defensive posture while slamming Mr Izmirlian.

“The PLP like to claim credit for this,” Mr D’Aguilar told Tribune Business of Baha Mar’s progress prior to Mr Izmirlian’s latest legal filing, “but I respectfully suggest it was delayed for two years by them.

“We need not rehash this any more; it’s water under

the bridge to me. We left $2 billion on the table. But enough of the talk, who caused what and who owed what to whom. The key is to get it operational and open.

It’s just a very unfortunate experience what happened; it is what it is.

“We’ve got to look forward and stop looking back.

If the PLP want to claim credit for it, go ahead. My belief is that it cost us $2 billion.”

Mr D’Aguilar expressed hope that Baha Mar, which is scheduled to add a further 2,000 employees over the next year, will ‘soak up’ some of those laid-off from

the public sector as the Government ‘right-sizes’ the civil service.

“This is what drives the economy; the private sector creating employment,” he told Tribune Business.

“We’re anxious to get it open, and those persons released by the Government to get a chance to be re-employed.

“This is the way to grow your economy; you let the private sector drive the growth. The previous government tried to solve the unemployment problem by expanding the public sector, and this policy does not work.”

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THE TRIBUNE

Tuesday, January 2, 2018, PAGE 5

$750m bond ‘prolongs savers’ punishment’ FROM PAGE 1 prolonged period of low returns on bank deposits as the proceeds from the $750 million bond flow into this nation.Excess liquidity, representing assets available for lending, but for which Bahamian banks cannot find suitable or qualified borrowers, jumped by $96.42 million in November 2017 alone to a record $1.849 billion. That figure represented a $402 million increase for 2017 to-date, with the Central Bank attributing the November rise to inflows from the Government’s bond.

Some of the bond proceeds were used to repay short-term Bahamian dollar advances to the Government, also resulting in the excess liquidity build-up.

And the country’s external reserves also received a one-off boost as they grew by $229.2 million to close November at $1.436 billion.

“Reflecting the receipt of net proceeds from the Government’s $750 million bond issue - after shortterm loan repayments - the [Central] Bank purchased a net of $255.2 million from the public sector, a turnaround from the previous year’s $47.3 million net sale,” the Central Bank said.

Mr Smith told Tribune Business that the Central Bank data reinforced his view that the Minnis administration would have been better off trying to meet more of its financing needs in the domestic capital markets, rather than increasing the Bahamas’ foreign currency borrowing and associated debt servicing costs.

“Right now we’re punishing savers, and savers are the guys you really want

in the economy,” he said, given that the increased excess liquidity and money supply would further depress interest rates.

“This [the bond effects] elongates the timeline for adjustment in the monetary sector. It will take a longer time for the banks to pay positive interest rates over and above what they’re paying now, 0.5-1 per cent. Because of the excess liquidity they can’t, so they’re not paying anything on savings deposits.”

The Bahamas is generally considered to lack a widespread savings culture, and Mr Smith warned that prolonged low yields would further discourage persons from contributing to a capital pool that could finance much-needed domestic investment and job creation.

“It can have a terrible effect on the economy,” he told Tribune Business, “because savers become disgruntled by not getting anything on their deposits in the banks, and may start making riskier investments outside the banking sector, funding businesses that cannot get a loan from the banks.

“It discourages savings even more. Every economy needs savings. It’s really a corollary of investing. The one thing you don’t want to do is discourage savings in the economy because, at the same time, it means dampening domestic investment and dampening job creation.

Fortunately, it’s [the bond] not an extreme amount, but it will exacerbate.”

The Government has already defended its decision to tap the international capital markets. K P Turnquest, deputy prime minister and minister of finance, previously told Tribune Business that the

Government would ‘mop up’ the excess commercial banking liquidity by placing the $570 million ‘balance’ of its $1.322 billion financing “envelope” in the local market.

He added that the Minnis administration had acted on strategic advice received from the Central Bank and other financial institution, which will have included its bond placement agents, Deutsche Bank and Royal Bank of Canada (RBC).

However, Mr Smith said receipt of the $750 million bond proceeds had acted as “a quantitative easing when you don’t really need it” in terms of holding down deposit rates. “All

of this had to be converted to Bahamian dollars and increased the money supply, potentially suppressing interest rates even more and for a longer period,” he told Tribune Business.

“It’s a straightforward conversion; if you borrow additional money in foreign currency to pay Bahamian dollar debts, it has to be converted to Bahamian dollars and increases the money supply. It’s kind of a quantitative easing when you don’t need it.”

Noting the Central Bank’s $255 million foreign currency purchase from the Government, Mr Smith added: “The money was paid in straight to the

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LEGAL NOTICE

NOTICE

NOTICE

________________

PROSPECTUS E.E.

Pursuant to the Provisions of Section 138 (8) of the International Business Companies Act 2000 notice is hereby given that the above-named Company has been dissolved and struck off the Register pursuant to a Certificate of Dissolution issued by the Registrar General on the 17th day of March, 2017.

NOTICE IS HEREBY GIVEN that a Special General Meeting of the Council of PROSPECTUS E.E. is hereby called to be held at the Registered Office of the Company on the 23rd day of January, 2018 at 12 o’clock in the forenoon. The object and purpose of said meeting is to have laid before the Council of the Executive Entity the accounts of the Liquidator, Delano Aranha, showing the manner in which the winding up of the Executive Entity has been conducted and also to hear any explanation that may be given by said Liquidator.

Delano Aranha Liquidator of MONTIC INC.

back - and the interest on it.

That’s unsustainable; we’re just delaying paying the piper.”

Mr Smith warned the Government against foreign currency borrowings for ‘balance of payments’ support, and to underpin the one:one peg with the US dollar. He added that Bahamian banks also needed to be given a reason “to nudge up interest rates on deposits and eliminate some of their non-interest charges for cashing cheques and wire transfers”.

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Central Bank, who in turn had to convert it to Bahamian dollars.

“What you have is you increase the foreign borrowing, which then has to be repaid with interest. The preferred method for dealing with that part of the monetary sector would be to pay down foreign currency debt with inflows from foreign direct investment and tourism spending.

“We just borrowed foreign currency, increased the reserves and have to use that amount to pay it

________________

Dated the 2nd day of January, 2018.

Delano Aranha Liquidator of PROSPECTUS E.E.

PAGE 6, Tuesday, January 2, 2018

THE TRIBUNE

CCA ‘went backwards’ on building Baha Mar FROM PAGE 1 month to month,” Mr Izmirlian and his BML Properties vehicle claimed.

“By way of example only, CCA reported in the September 2013 report that its MEP work was 44.2 per cent complete, but then a mere 30 days later claimed that the same MEP work was only 39 per cent complete, a retrograde movement of 5.2 per cent, without explanation.”

Mr Izmirlian identified a similar issue in CCA’s December 10, 2013, monthly report, and alleged: “CCA stated that all buildings were, as of the end of November 2013, ahead of schedule when in fact each and every building was behind schedule.

“CCA’s statement that the completion percentage as of the end of November 2013 was 42.3 per cent

is contradicted by CCA’s October 2013 report, in which CCA claimed that such was 55 per cent complete (never explaining how ‘completion’ could move 12.7 percentage points retrograde).”

And, referring to the same CCA report, Mr Izmirlian continued: “CCA stated that as of the end of November 2013 that the MEP work was 48.5 per cent complete, which level of completion was contradicted in the agreed CCA payment application for that same time period as 41 per cent complete.”

Mr Izmirlian cited these alleged discrepancies to back up his fraud and breach of contract claims on the basis that CCA consistently misrepresented and covered up its progress, or lack of it, on Baha Mar’s construction.

CCA last week hit back at Mr Izmirlian’s allegations, describing them

NOTICE OF DISSOLUTION NOTICE IS HEREBY GIVEN as follows: JAYM Ocean Limited is in voluntary dissolution under the provisions of Section 138 (4) of the International Business Companies Act 2000.

The dissolution of said company commenced on the 13th of December 2017 when the Articles of Dissolution were submitted to and registered by the Registrar General.

The Liquidator of said company is Petaluma Limited, PO Box SP-63146, Nassau, Bahamas.

All persons having Claims against the abovenamed Company are required to send their names, addresses and particulars of their debts or claims to the Liquidator before January 13th 2018.

a) b)

c) d)

as “vindictive and baseless,” and a “gross abuse of the American judicial system”.

It did not explain why any of the former developer’s extensive claims was “baseless”, but pledged that the lawsuit will be “vigorously defended”.

The Chinese state-owned contractor has long argued that Baha Mar’s collapse into Chapter 11 bankruptcy protection, and subsequent receivership and liquidation, resulted from mismanagement by Mr Izmirlian and his executive team.

It has cited numerous design changes, and hundreds of alterations to already-completed building work, known as construction change directives (CCDs), as reasons for both cost overruns and its inability to complete Baha Mar ‘on time and on budget’.

Mr Izmirlian’s lawsuit, though, refutes all these claims. While CCA had argued it was “entitled to extra time or money, or both” because of an alleged ‘late design’ for Baha Mar’s cooling wells, the former developer hit back by claiming any delay resulted from the contractor’s “failure” to investigate and order the necessary pumps on time.

“Numerous (well over 50) claims of design delay

made by CCA were false on their face, with documented delivery of the allegedly delayed designs existing in correspondence and other documents in the possession of CCA even before CCA made the statement in its September 2013 report,” Mr Izmirlian alleged.

Turning to similar claims in CCA’s December 2013 report, he further claimed: “By way of example as to the specious basis for CCA’s claimed ‘design delays’, CCA claimed 28 days of delay in the Podium [Baha Mar’s ‘back of house’ facilities] due to ‘additional roof drains’, and blamed Baha Mar Ltd for adding numerous drains to the plans.

“Oddly, this same event was reported as two days ahead of schedule in the immediately preceding monthly report authored by CCA, and thus in a month with only 30 calendar days, CCA claimed it incurred that entire 30-day period in delays.

“Regardless of these obviously improperly prepared aspects of the reports (and thus inherently inaccurate reporting by CCA), CCA blamed Baha Mar Ltd for the delays,” Mr Izmirlian continued.

“However, the number of roof drains had increased by only four (out of 300 total locations) since

NOTICE

NOTICE is hereby given that JAMES MORICETTE of General Delivery, Marsh Harbour, Abaco, Bahamas is applying to the Minister responsible for Nationality and Citizenship, for registration/naturalization as a citizen of The Bahamas, and that any person who knows any reason why registration/naturalization should not be granted, should send a written and signed statement of the facts within twentyeight days from the 2nd day of January, 2018 to the Minister responsible for nationality and Citizenship, P.O. Box N-7147, Nassau, New Providence, Bahamas.

Dated this 15th day of December 2017. ______________________ Petaluma Limited Liquidator

MARKET REPORT THURSDAY, 28 DECEMBER 2017

t. 242.323.2330 | f. 242.323.2320 | www.bisxbahamas.com

BISX ALL SHARE INDEX: CLOSE 2,061.04 | CHG 0.00 | %CHG 0.00 | YTD 122.83 | YTD% 6.34 BISX LISTED & TRADED SECURITIES 52WK HI 4.38 19.17 9.09 3.76 1.77 0.16 5.60 8.70 6.30 5.30 12.00 2.59 1.56 6.01 10.55 11.00 4.50 7.25 12.51 11.00

52WK LOW 4.00 17.43 8.19 3.32 0.95 0.12 3.50 8.40 5.83 3.15 9.00 2.18 1.40 5.82 8.78 5.67 3.35 6.61 12.01 10.00

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Cable Bahamas Series 6 Cable Bahamas Series 8 Cable Bahamas Series 9 Cable Bahamas Series 10 Colina Holdings Class A Commonwealth Bank Class Commonwealth Bank Class Commonwealth Bank Class Commonwealth Bank Class Commonwealth Bank Class Commonwealth Bank Class Fidelity Bank Class A Focol Class B

PREFERENCE SHARES

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1.00 100.00 100.00 100.00 105.00 100.00 100.00 10.00 1.00

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E J K L M N

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CAB6 CAB8 CAB9 CAB10 CHLA CBLE CBLJ CBLK CBLL CBLM CBLN FBBA FCLB

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Bahamas Note 6.95 (2029) BGS: 2015-1-3Y BGS: 2014-12-5Y BGS: 2015-1-5Y BGS: 2014-12-7Y BGS: 2015-1-7Y BGS: 2014-12-30Y BGS: 2015-1-30Y BGS: 2015-6-3Y BGS: 2015-6-5Y BGS: 2015-6-7Y BGS: 2015-6-30Y BGS: 2015-10-3Y BGS: 2015-10-5Y BGS: 2015-10-7Y

BAH29 BG0203 BG0105 BG0205 BG0107 BG0207 BG0130 BG0230 BG0303 BG0305 BG0307 BG0330 BG0403 BG0405 BG0407

BAHAMAS GOVERNMENT STOCK - (percentage pricing) 115.92 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00

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MUTUAL FUNDS 52WK HI 2.11 4.13 1.98 176.30 149.66 1.52 1.69 1.61 1.10 6.99 8.54 6.15 10.52 11.46 10.46

52WK LOW 1.67 3.04 1.68 164.74 116.70 1.46 1.62 1.56 1.04 6.41 7.62 5.66 8.65 10.54 9.57

LAST CLOSE 4.00 17.43 9.09 3.34 0.95 0.16 3.70 8.70 6.10 4.88 9.00 2.56 1.50 6.00 10.45 6.00 4.48 7.01 12.51 10.00

CLOSE 4.00 17.43 9.09 3.34 0.95 0.16 3.70 8.70 6.10 4.88 9.00 2.57 1.50 6.00 10.45 6.00 4.48 7.01 12.51 10.00

CHANGE 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.01 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

1000.00 1000.00 1000.00 1000.00 1.00 100.00 100.00 100.40 100.00 100.00 100.00 10.00 1.00

1000.00 1000.00 1000.00 1000.00 1.00 100.00 100.00 100.40 100.00 100.00 100.00 10.00 1.00

0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

LAST SALE 100.00 100.00

CLOSE 100.00 100.00

CHANGE 0.00 0.00

109.86 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00

-0.09 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

109.95 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00

FUND CFAL Bond Fund CFAL Balanced Fund CFAL Money Market Fund CFAL Global Bond Fund CFAL Global Equity Fund FG Financial Preferred Income Fund FG Financial Growth Fund FG Financial Diversified Fund FG Financial Global USD Bond Fund Royal Fidelity Bahamas Opportunities Fund - Secured Balanced Fund Royal Fidelity Bahamas Opportunities Fund - Targeted Equity Fund Royal Fidelity Bahamas Opportunities Fund - Prime Income Fund Royal Fidelity Int'l Fund - Equities Sub Fund Royal Fidelity Int'l Fund - High Yield Fund Royal Fidelity Int'l Fund - Alternative Strategies Fund

VOLUME

VOLUME

NAV 2.11 4.13 1.98 176.30 149.66 1.52 1.69 1.61 1.09 6.97 8.00 6.25 10.96 11.60 10.08

EPS$ 0.444 0.932 -0.508 0.540 -1.220 0.000 -1.462 0.611 0.583 0.192 0.631 0.102 0.392 1.129 0.729 0.484 0.298 -0.668 0.543 0.000

DIV$ 0.080 1.130 0.000 0.230 0.000 0.000 0.000 0.300 0.220 0.160 0.690 0.060 0.050 0.290 0.500 0.000 0.120 0.140 0.580 0.000

P/E 9.0 18.7 N/M 6.2 N/M N/M -2.5 14.2 10.5 25.4 14.3 25.2 3.8 5.3 14.3 12.4 15.0 -10.5 23.0 0.0

YIELD 2.00% 6.48% 0.00% 6.89% 0.00% 0.00% 0.00% 3.45% 3.61% 3.28% 7.67% 2.33% 3.33% 4.83% 4.78% 0.00% 2.68% 2.00% 4.64% 0.00%

0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000

0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

0.00% 0.00% 0.00% 0.00% 6.25% 6.25% 6.25% 6.25% 6.25% 6.25% 6.25% 7.00% 6.50%

INTEREST 6.00% Prime + 1.75%

MATURITY 31-May-2018 19-Oct-2022

6.95% 4.00% 4.25% 4.25% 4.50% 4.50% 6.25% 6.25% 4.00% 4.25% 4.50% 6.25% 3.50% 3.88% 4.25%

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NAV Date 30-Nov-2017 30-Nov-2017 24-Nov-2017 30-Sep-2017 30-Sep-2017 31-Oct-2017 31-Oct-2017 31-Oct-2017 31-Oct-2017 30-Sep-2017 30-Sep-2017 30-Sep-2017 30-Sep-2017 30-Sep-2017 30-Sep-2017

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TO TRADE CALL: CFAL 242-502-7010 | ROYALFIDELITY 242-356-7764 | FG CAPITAL MARKETS 242-396-4000 | COLONIAL 242-502-7525 | LENO 242-396-3225

Construction Change Directive (CCD) 233 had been issued ten months earlier on February 27, 2013.

As of the end of November, CCA had only installed two such roof drains (out of the 300).”

And, in a final salvo directed at CCA’s construction change directive claims, Mr Izmirlian alleged: “CCA claimed delays in the Convention Centre ‘due to 39 CCDs issued in September and October’ 2013, yet the reports for those months make no mention of this and, in any event, elsewhere in the November 2013 report CCA advises that the Convention Centre would be completed on schedule by March 31, 2014.”

Mr Izmirlian and BML Properties are alleging that CCA used the ‘delays’ as excuses for its failure to meet project deadlines, and to conceal its “true intent” from them.

“It intended to finish as and when it chose, and certainly not complete until it had collected (via extortion if need be) every penny available under the [$2.45 billion] loan from China Export-Import Bank, all while maintaining as best it could the appearance that it would complete these elements and the whole of the resort on time and on budget,” the former developer alleged.

His lawsuit also revealed an April 18, 2014, report sent to CCA chief executive, Ning Yuan, which disclosed that the Government had “recently issues two ‘stop work orders’ due to ‘questionable workmanship’” on the project.

This, again, suggests that the former Christie administration knew - or should have known - about Baha Mar’s construction woes,

and alleged problems with CCA’s workmanship, long before the Chapter 11 filing. And it again raises questions about why it so eagerly sided with the Chinese against Mr Izmirlian.

The former developer’s April 14, 2014, to the chairman of CCA’s parent, China State Construction Engineering Corporation (CSCEC), warning that Baha Mar was “running out of time and urgent decisions are needed”, also failed to provoke a response.

The end result was that, just two months before Baha Mar’s first (ultimately missed) December 2014 opening deadline, just “a mere 10 hotel rooms” had been brought by CCA to the point of ‘punch listing’ for minor corrections.

“CCA stated that during the week commencing December 15, 2014, CCA would turn over 18 floors across four different hotels for Baha Mar for its consultants to ‘punch’ (or inspect for minor repairs or painting needed), totalling approximately 350 rooms,” Mr Izmirlian alleged.

“CCA did not come anywhere close to that. Indeed,

by December 15, only 10 rooms in one hotel had been turned over in that condition.... CCA stated in the Version 5 schedule that CCA had already handed over for ‘punch’ 61 separate rooms in the Podium [back of house]. “CCA knew when it created that this claim was not true - CCA had only handed over five rooms, nine were close to being handed over, and the balance of 49 rooms were not complete, creating further delays in the schedule.. and requiring diversion of resources from elsewhere to address the key ‘Critical Path’ components found in the Podium.”

NOTICE

NOTICE is hereby given that EMILET DOR of Podoleo Street, Nassau, New Providence, Bahamas is applying to the Minister responsible for Nationality and Citizenship, for registration/naturalization as a citizen of The Bahamas, and that any person who knows any reason why registration/ naturalization should not be granted, should send a written and signed statement of the facts within twenty-eight days from the 2nd day of January, 2018 to the Minister responsible for nationality and Citizenship, P.O. Box N-7147, Nassau, New Providence, Bahamas.