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CCA Bahamas comments on Baha Mar project

Late Friday, CCA Bahamas Ltd issued a press release with a statement regarding the Baha Mar project. Read the full communication here. 

Source:
Date:
Updated:
CCA Bahamas Ltd (text only)
Monday, July 27, 2015
Monday, July 27, 2015

CCA BahamasNASSAU, The Bahamas, July 24, 2015 /PRNewswire/ — CCA Bahamas Ltd. (CCA Bahamas), a wholly owned indirect subsidiary of China State Construction Engineering Corporation Limited (CSCEC) and the construction manager/ general contractor for the $3.5 billion Baha Mar resort project, today issued the following statement regarding the Baha Mar project:

“CCA Bahamas continues to make every effort to work constructively with the Bahamian government, China Exim Bank, and Baha Mar Ltd. to reach a successful resolution that will enable us to restart work and complete the Baha Mar resort project.”

“CCA Bahamas has a firm, binding contract in place with Baha Mar Ltd. to serve as the construction manager/ general contractor for the Baha Mar project. This is a condition of the $2.5 billion senior bond issued by China Exim Bank to finance the construction of the Baha Mar project and the terms cannot be voided by any parties.”

“Through CCA Bahamas, thousands of Bahamian subcontractors and workers have been employed during the construction of the resort. CCA Bahamas’ expertise and oversight of the project is essential to successfully completing the resort as quickly as possible, and putting Bahamians back to work. If a resolution is reached swiftly, CCA Bahamas believes Baha Mar can be finished in time for the winter high season.”

“CCA Bahamas remains fully committed to seeing the Baha Mar project through to 100% completion, so that the resort can achieve its true purpose: providing thousands of high-quality jobs to the Bahamian people, and an ongoing economic boon to The Bahamas.”

Established in 1985, China Construction America (CCA) is the North American and South American subsidiary of CSCEC. CSCEC is a public company listed on the Shanghai Stock Exchange with a total market capitalization of $48 billion as of June 2015. Ranked 37th among Fortune Global 500 companies in 2015 and no. 1 on the ENR Global Contractors list in 2014, CSCEC is unrivaled by any other construction company in the world.

CCA Bahamas is a wholly owned subsidiary of CCA with founding principles of integrity and innovation with quality assurance and value creation.  With a revenue of approximately $2 billion in 2014, CCA is ranked no. 32 top contractor in the US. In accordance with its core values, CCA is committed to creating value for all stakeholders and building a better Bahamas and a better world.

[Update: The following is additional information issued from CCA Bahamas Ltd through the BusinessWire press releases service July 26, 2015]

Below are key facts about CCA Bahamas’ legacy business interests in the Baha Mar resort project and its continued initiatives to reach a successful resolution:

1. We have never had any development responsibilities with respect to Baha Mar. Our role has been—and will continue to be—limited to that of a construction contractor. In an effort to resurrect Baha Mar, our Company went above and beyond the obligations of a traditional construction contractor and made a minority equity investment of $150 million (preferred shares) in Baha Mar Ltd. (BML) which was indispensable to the funding of the project.

2. We have a firm, binding contract in place with Baha Mar Ltd. to serve as the construction manager/ general contractor for the Baha Mar project. BML has failed to pay us the normal monthly construction progress payments of approximately $72 million for the first five months of 2015 and has not honored our requests for additional payments of approximately $70 million for outstanding construction change orders.

3. BML is bankrupt because it repeatedly made mistakes in the development of Baha Mar. Their attempts to place blame on CCA Bahamas are self-serving explanations to deflect attention from their own negligence and mismanagement of the resort’s development. However, despite their serial missteps and purposeful avoidance of its contractual payment obligations, we are once again offering to provide financial assistance to help save Baha Mar and create thousands of jobs for the Bahamian people.

4. Completing Baha Mar is a major priority for our Company. It is the largest project of its kind in the history of the Caribbean and a national priority for the people and government of The Bahamas. To demonstrate our strong confidence in the project and further reinforce our continued commitment to completing Baha Mar, we have offered to invest an additional $100 million in BML and provide a guarantee of $175 million to China Exim Bank in connection with China Exim Bank’s new $200 million loan facility to BML.

5. To satisfy China Exim Bank’s clear requirements for a guarantee of the new loan facility, we have asked BML to provide a similar guarantee. Mr. Izmirlian has categorically rejected our reasonable request for a counter guarantee—one which would put the Baha Mar resort project back on track for completion.

6. BML has counterproductively demanded that we reduce the value of our existing equity investment ($150 million of preferred shares) in BML, to $75 million—a 50% write-down ($75 million) of our equity investment in BML and has also requested that the interest rate on our investment in BML be reduced to zero.

Tax exemptions agreed in the Hawksbill Creek Bill are due to be extended by six months ahead of the agreement's August expiration date, according to a communication by Prime Minister Perry Christie. Watch a news report and read the full communication here.

Baha Mar Ltd. issued the following statement with regard to CCA Bahamas Ltd's ("CCA") press release dated July 26:

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