Prime Minister’s Statement on Atlantis Resort & Recent Developments With Brookfield

Transcript: Grand Bahama Press Conference Media Query Response

THE PRIME MINISTER: You know, when I came to office in 1992 Resorts International on Paradise Island was in bankruptcy. We did not panic in The Bahamas at that time. When Kerzner came in he bought it out of bankruptcy; meaning that they couldn’t pay all of their debts and they went into bankruptcy.

Kerzner International now has a loan for $2.3 billion and the security for the loan is the properties on Paradise Island. Much of the loan money was spent outside The Bahamas. It was inappropriate and wrong for the Government of The Bahamas (Christie administration) to agree for the properties on Paradise Island to be put up as a security for a loan where the proceeds of the loan were going to be spent outside The Bahamas.

That was a big, big mistake.

Kerzner International has been unable to service this loan. There are seven lenders – Brookfield is one of the seven lenders. Brookfield was able to get the support of four of the remaining six lenders for the activities which it wanted to undertake which were to acquire Mr. Kerzner’s interest in the hotel and for the lender to become the owner of the property.

Two of the lenders who are owed $112 million out of $2.3 billion went to court in Delaware and argued that Brookfield was getting an advantage vis-à-vis them. Brookfield was confident that it would win the case and proceeded accordingly.

When Brookfield got the decision on Friday night or Saturday morning that the judge was going to put a restraining order – meaning that it could not proceed – they determined that they were not going to proceed like that anymore.

The Government of The Bahamas did not have any opportunity to approve Brookfield to buy Kerzner’s interests or to have it transferred to them. Brookfield only put in an application to the Government on Friday past. And before the end of the day on Friday they advised my office not to proceed with considering the application.

So, all of the talk about what agreement has been done [and] what approvals have been done are all nonsense as they don’t exist.

Question: What do you make of [Opposition Leader] Mr. Christie’s current public posture that the Government is being less than frank on this issue?

THE PRIME MINISTER: Mr. Christie’s mouth and brain are not in sync, they don’t work well together.

Question: So what now?

THE PRIME MINISTER: We do not know precisely what these seven lenders are going to agree. At the moment, the property is still owned by Kerzner, Kerzner is still managing the property, there has been no change, no jobs have been lost. Atlantis is having a far better season now than it had last year, its bookings going forward are very good for the year.

There is no need for any concern at the moment. The lenders themselves would like to collect their money back. In order for them to collect their money back, it is important for Kerzner’s property on Paradise Island to be successful – it is not in the lenders’ interest for it not to be successful because otherwise they would not get their money back.