Brassington pawns Marriott, adjoining state lands for US$29M
By Abena Rockcliffe
From all indications, Republic Bank has not been able to gather investors to contribute to a US$28M syndicated
AHI and NICIL boss, Winston Brassington
loan for Atlantic Hotel Inc. (AHI) needed for the completion of the Marriott branded hotel in Kingston, Georgetown.
This has been made evident by the mortgaging or pawning of the hotel for some US$27M. The hotel was mortgaged to the very bank that was to be the lead lender of the syndicated loan (a loan offered by a group of lenders.)
Also, AHI which was set up as a Special Purpose Vehicle to oversee the Marriott and is essentially being controlled by the National Industrial and Commercial Investments Limited (NICIL) has mortgaged the neighbouring land that once accommodated the Government Analyst-Food and Drug Department for US$2M.
The accumulated loan for the two assets amounts to $US29M slightly more than what was supposed to be sourced through Republic Bank as a syndicate.
According to the Official Gazette published on November 22, last the US$2M mortgage of the state land “and all future building and erections that may hereafter be constructed or erected” will last for a term of 99 years.
Kaieteur News was not able to confirm with Republic Bank the reasons for the change of plans. But, in September, Executive Director of NICIL, Winston Brassington, who also heads AHI and has been consulting and negotiating with himself on behalf of NICIL and AHI, said that the Republic Bank was “close to finalizing the documentation for the debt financing agreement.
He had said that the paperwork is currently holding up the Hong Kong businessmen, Victor How Chung Chan and Xu Han, from finalizing their one-off payment of US$8 million for their 67 per cent equity in the hotel.
Brassington stated that once the security documentation for the US$27 million debt financing was finalized the two investors would be making their payment.
He had noted that the Hotel was still aiming for a December opening.
However, later on in September, Alliance For Change (AFC) leader, Khemraj Ramjattan, told the media that the hotel was in shambles. He said that investors are unwilling to invest at such a time when it is unsure whether the People’s Progressive Party (PPP) administration will remain in power.
Ramjattan said, that it has been communicated to him that the investors are not committed to the Marriott at this time.
Ramjattan told the media that the No-Confidence Motion which his Party tabled has resulted in “some serious hesitation” on the part of the investors.
He said, “They were supposed to put the money in, but they have not, but like the behaviour of all the investors, they don’t want to invest when things seem unstable.”
“They know that elections are coming soon and we have made a statement that we are going to question all these projects by the Government, and if we find anything illegal we will revoke the contract. These investors, I understand, are concerned about that statement,” said the AFC Leader.
Ramjattan told the media that from all indications, the investors are worried to the extent that “they are saying let us see what transpires later down the line. They feel as if it is not safe to invest at this point.”
Brassington had even gone to China to seek new investors.
To date, all the money that has been spent on the Marriott has been taxpayers’ dollars. NICIL has officially expended US$20M building the controversial Marriott Hotel.
AHI also leased the prime seven acres of shorefront property on which the hotel rests for a measly US$120 (G$24,000) per month with an option to buy.
The Marriott will boast 197 rooms, a large ballroom, conference centre, casino, nightclub, restaurant, a concrete walkway and all other amenities of a world-class hotel.
The project is an estimated total investment of US$51M.