Christie defends support of Kerzner borrowing
Defending his administration’s support of Kerzner International’s decision to use its Bahamian assets to back the borrowing of $2 billion for international developments, former Prime Minister Perry Christie said that at the time his government had no idea that the economy would collapse.
Christie was responding to Prime Minister Hubert Ingraham, who said in the House of Assembly on Tuesday the Christie administration allowed Kerzner’s debt to pile up.
“It would have been wonderful to have the hindsight of the prime minister to be able to say after the fact that it was a bad deal or it should not have been done,” Christie told The Nassau Guardian.
“You know 20/20 vision is like that. But the fact is this, no one would have anticipated an international recession that would make a [financial fire] like Lehman Brothers go under.
“Lehman Brothers had considerable assets in The Bahamas. And so it’s the same kind of situation that [Kerzner International Chairman and CEO Sir Sol Kerzner] faced. With the onset of the recession, he had incredible challenges and those challenges resulted in the transfer of his assets.”
Kerzner announced on Tuesday that his company has transfered its ownership of the Paradise Island properties to Brookfield, a Canadian publicly-traded company with $159 billion in assets. Kerzner’s properties include Atlantis Resort and One&Only Ocean Club.
Kerzner transfered the resorts to pay off debt. Part of that debt is an outstanding $175 million loan from Brookfield.
During a communication in the House of Assembly, Ingraham pointed out that Kerzner has a debt that is supported by the assets in The Bahamas of $2.3 billion.
““The reality is Kerzner International in The Bahamas is a very profitable company,” Ingraham said.
“It has nothing to do with whether Atlantis makes enough money. It has more than enough. It has more than $100 million in cash.
“It just happened to have too much debt piled up on top of it for all things that weren’t done in The Bahamas and it did so with your (the Christie government’s) blessing and support.”
But Christie said that at the time his government made the decision to allow Kerzner to use Bahamian assets, he had confidence in Kerzner’s ability to pay his debts.
“The point is that Kerzner’s preeminence in The Bahamas, his incredible level of success, truly demonstrated to the outside world that you could invest in the resort business in The Bahamas and make a profit,” Christie said.
“He made that a reality in our country. With that level of success [Kerzner] approached me to indicate that [he] would wish to take the company into a privately-owned company.
“I realized that when they were talking about financing internationally and branding Atlantis and One&Only around the world, that we had this opportunity in an international tourist world that was growing smaller to truly impact The Bahamas by having a brand that would be in the Arab world where wealth is abound.”
Christie added that Sir Sol at the time was also talking about another “major investment in The Bahamas”.
“He had confidence in The Bahamas and we had confidence in him at the time,” Christie said.