Weeks after stating on August 4 that the parties involved in the sale of the Grand Lucayan resort in Freeport have agreed to a 45-day extension to “complete requisite legal documentation”, Lucayan Renewal Holdings Limited (LRHL) said on Friday that 45-day extension, which expired on September 15, had been for “due diligence” and, by virtue of this, the final closing date was also extended to November 15.
The new announcement of a November 15 closing date is a full two months’ extension from the closing announced by officials in May.
On May 11, Acting Prime Minister and Minister of Tourism, Investments and Aviation Chester Cooper announced that the government has agreed to sell Grand Lucayan to Electra America Hospitality Group for $100 million, adding that 2,000 construction jobs and 1,000 permanent jobs will be made available as a result.
Electra committed to a $300 million development of the property, which the Minnis administration bought from Hutchison Whampoa in August 2018 for $65 million.
LRHL, the special purpose vehicle set up to oversee the sale, said on Friday, “negotiations toward a successful deal on the Grand Lucayan resort continue to progress satisfactorily”.
Lucayan Renewal said, “It was announced in the first week of August in a joint statement with Electra America Hospitality Group that the due diligence period was extended by 45 days to September 15.
“By virtue of this, the final closing date was also extended to November 15, 2022. We note that the recent seven-day extension did not impact the agreed November closing date.”
It added, “We anticipate that the sales process will be completed consistent with our revised timelines. The Board of LRHL remains committed to ensuring that a credible plan and shared vision for the resort is realized – a plan that will provide jobs, entrepreneurial opportunities and strengthen Grand Bahama’s economy.”
LRHL also said, “We remain on track for a successful purchase and signing of a heads of agreement in the best interest of the people of Grand Bahama. There are matters connected to the transaction that are still being negotiated; we look forward to briefing the public as soon as negotiations are concluded.”
The recent statement did not include a comment from Electra.
In the August 4 statement, Russ Urban, CEO, Electra America Hospitality Group, said, “We are excited about Grand Bahama Island and, as we move forward with closing the deal, we reassure the people of Grand Bahama of our commitment to developing a world-class resort and collaborating on community development initiatives.”
Officials said in May the agreement with Electra was subject to a 60-day due diligence period with closing no later than 120 days.
Cooper said at that signing the government “truly” believes that Electra will be good for Grand Bahama.
He noted that the group, whose principals boast over 150 years of collective experience in the hospitality business, is a part of a conglomerate, Electra America, with worldwide assets worth $7 billion in significant holdings.
Former Chairman of Lucayan Renewal Holdings Michael Scott, KC, said on Thursday Grand Lucayan is not worth anywhere near $100 million.
Scott said the resort was appraised at $40 million while he was chairman.
He opined that without firm announcements on a redeveloped airport, no investor is likely to be comfortable with moving forward with a deal to purchase and redevelop the resort.
At the time the sale to Electra was announced in May, Cooper acknowledged that airlift is a critical component to the revitalization of Grand Bahama. The airport was badly damaged in Hurricane Dorian in 2019.
The government has committed to rebuilding and reopening a world-class airport by 2025.
