There are no records of annual return filings during the APNU+AFC’s five years in office for the Marriott Hotel and it is unclear if the hotel has been able to start repayments on its loan, due since 2017.
At the Deeds registry, this newspaper was told that while internal data showed that annual return for 2015 was filed in 2019, there are no records on its file to substantiate this, as only the report for the year ending December 2014 was in the company’s file.
When asked the reason for this, an employee told the Stabroek News that she did not know and as such this newspaper would only be able to get the 2014 filing as those records are in the company’s file.
Former Minister of Finance Winston Jordan, when contacted, directed that all questions on why there were no filings be put to AHI’s last Chairperson, Hewley Nelson.
Repeated calls to Nelson’s mobile went unanswered. But even while Nelson was Chairman, Stabroek News’ attempts to glean information concerning the company’s finances were futile.
The last financial update on the hotel had come Jordan, back in 2017 when he had said that the hotel had not been able to service its loan and that government had to step in to assist.
Jordan had announced in March of 2017 that government had been servicing the loan owed by Atlantic Holdings Incorporated to Republic Bank Limited of Trinidad for the construction of the Marriott Hotel.
He had said that neither AHI nor its loan guarantor, National Industrial and Commercial Investments Limited (NICIL), could have afforded to service the US$15.25 million loan accessed for the construction of the hotel, which has forced government to absorb the biannual US$1.1 million in non-budgetary expenditure.
According to Jordan, the government had US$748,000 for the period and unless AHI was able to assume the debt, it would continue to pay US$1.1 million every six months for the next 13 years.
With no financial reports available, it is unclear if the company has turned a profit since that time or if government was still paying its loan.
However, Chairman of the Atlantic Hotel Inc (AHI), operating as the Marriott Hotel, Devindra Kissoon, says that the hotel has had an over 80% occupancy for the last two years. “The Marriott has been recording strong occupancy [over 80% in 2020 and 2021],” Kissoon, who was appointed Chairman in 2020, said in response to questions from the Stabroek News on a status update.
Kissoon was optimistic that event with the unveiling of the Pegasus Hotel expansion, Marriott’s performance would not be affected. “The Marriott is a unique branding position and accordingly new or expanded entrants to the market is not expected to affect the hotel’s performance,” he said.
‘Satisfied’
In 2014, Brassington, then Chairman of AHI, had stated in the annual report that losses for the 2014 year totalled $0.5 million, the same as it had in 2013. The company’s income statement had showed that it paid $494,300 in rates and taxes in 2014, up from $491,800 the year before.
The report stated that while there was a loss, Brassington was “satisfied that the company has adequate resources to continue to operate for the foreseeable future” and “for this reason, the company continues to adopt the “going concern” basis for preparing the accounts.
But Jordan in 2017 had said that even if the hotel did well that year, it “it would not be able to pay its debt.”
He reasoned that the entertainment part of the hotel would make the money and not occupancy. “Remember it is the entertainment part that is going make it… that is not being done so for the time being now unless we just say ‘take the asset’, it is the government which has to come in now. That is an unbudgeted expense, where are we going to find the money? We have to find the money otherwise we lose the asset,” he had explained.
‘No decision’
The 197-room Marriott hotel was constructed at a cost US$58 million. The majority of this was state funds but a total of US$15.25 million was received from Republic Bank Ltd as part of the US$27 million debt financing for it.
The Hotel’s new Chairman said that no decision has been on the entertainment complex. “No decision has been made or contemplated for entertainment complex at this juncture,” he said.
A 2015 forensic audit of the hotel had urged government to “proceed with haste” to sell the Marriott Hotel in light of uncertainty about the financial viability of its operations and rising costs that could take the final price tag for the project to at least US$98 million.
The audit, conducted by former Auditor-General Anand Goolsarran, had noted that there was a “serious risk” of default in relation to the Republic Bank loan used for construction.
In his report, Goolsarran explained that the loan was secured by “debenture and mortgages.” He declared that these conditions have serious implications should AHI default in payment. The loan is repayable at rates of 9.15% and 8.65% during construction and post-construction phases, respectively, via 26 equal, blended, semi-annual payments of principal and interest. However, there is an 18-month moratorium on interest and a 24-month moratorium on principal from the date of first disbursement.
The report had also said that given a statement by Brassington in relation to the absence of market intelligence on the operations of casinos, it was advisable not to proceed with the construction and outfitting of the Entertainment Complex, estimated to cost US$12 million.
But under the APNU+AFC, AHI had in 2017 invited the submission of expressions of interest (EOIs) from firms to complete the construction and outfit and operate its casino, which it said would be annexed to the hotel.
Nelson had said that AHI’s board understood the long-term financial benefits of going ahead with the gambling facility.
“Since we entered into the brand coming to Guyana and all of that, we have always established that the casino will be a major contributor towards the financial packages of the Marriott. You have to understand that the casino was pegged to contribute at least sixty percent of the revenue so that the Marriott could serve its financial commitments. Do you know what sixty percent is? So we have that established,” he said.
“There has always been that link between the hotel and the casino .There are a number of linkages to be established with the casino. They would have more guests… and other activities that would enhance the income generating aspect of the hotel. So that was the cornerstone of the feasibility study. So, it is feasible to go ahead with the casino, making it for the generating of income to enhance its viability,” he added.
The area designated for the casino this year was renovated to hold booths for the recent oil and gas conference and expo.
