Hotelier Robert Badal says that he is not participating in the new round of bids for Marriott Hotel Guyana as he does not think that reserve price set of US$85m is worth it.
In an invited comment to Stabroek News following the report in yesterday’s Sunday Stabroek that government holding company, NICIL had resumed accepting bids for the hotel, Badal said “I have already offered the best price I could possibly have given the information received. My offer of US$55.5M reflects 15 times the current annual earnings which I believe is very attractive to any seller given that the valuations of large Blue Chip Global companies on Wall Street ranges between 8 and 12 times earnings”. He noted that even NCB Capital, an authority on valuing Investments, thought that US$33M was a fair price. NCB had tendered that bid in the earlier round of invitations for expressions of interest.
Badal, the owner of the Pegasus hotels said that the absence of a transparent process was also a concern for him. He said that no audited financial statements had been made available for the hotel.
After the quashing of tendering in April for the sale of the Marriott Hotel Guyana, state holding company, NICIL asked the original participants to resubmit bids and set a base price of US$85m.
There was no word to the public by the National Industrial and Commercial Investments Limited (NICIL) on this new invitation and according to documents seen by the Sunday Stabroek, tomorrow has been set as the deadline for the submission of the new bids.
Numerous questions were raised on April 27 when Vice President Bharrat Jagdeo announced at a press conference that the hotel will remain under the government’s control for now as it will not be moving ahead with its sale given that the highest bid to purchase the hotel was only US$65m.
Jagdeo said that they were only testing the market when they went to tender, stressing that they will keep control of the hotel until they are able to attract a bid which reflects the real value of the hotel and its capacity to earn.
He stated, “When we went out to tender we were testing the market… We believe in the government that none of the bids meet our price expectations and therefore we will not proceed with any of those bids.”
No official announcement was made by NICIL on the fate of the tendering but on May 2nd, it wrote to the bidders inviting them to resubmit bids for its shares in Atlantic Hotel Inc which is the parent company of the hotel.
NICIL provided a listing of assets, liabilities and payables and explained what was expected in each category on the sale of the hotel. It added that “Bids below USD85 Million will automatically be rejected”.
In the April tendering round, American businessman and entrepreneur Ramy El-Batrawi, founder of investment group X, LLC tendered the highest bid for the hotel of US$65m. Nothing has been heard from him on the cancellation of the first round of bids.
Badal tendered the second-highest bid of US$55.5 million for the purchase of the state-owned Kingston hotel.
Chief Executive Officer of NICIL, RK Sharma, in a statement issued following the opening of the tenders, had named the bidders as Georgetown Investments and Management Services Inc (Mustafa Eray Kanmaz), X LLC (Ramy El- Batrawi), Muneshwers Limited (Amarnath Muneshwer), Integrated Group Guyana Inc. (Ravindra Prashad) and NCB Capital Markets (Steve Gooding).
NCB Capital Markets of Jamaica, the wealth and asset management arm of the National Commercial Bank submitted a US$33 million bid while Integrated Management Group and Georgetown Investments and Management Services, which currently operates the Princess Hotel Casino, tendered bids amounting to US$55 million and US$50 million respectively. Muneshwers Limited tendered a bid of US$25 million.
Last year, NICIL had issued a ‘Pre-qualification Notice’ seeking Expressions of Interest (EOIs) from persons or companies, individually or as part of a joint venture/consortium, with an interest in purchasing its shares in AHI for the acquisition of the Guyana Marriott Hotel.
The closing date for EOIs was 10th January 2023 at 2:00 pm.
Controversially built by taxpayers’ money and a loan, the hotel was opened on April 16, 2015 but was not able to service its loan.
