Investor frustrated at delay in concluding Marriott deal
-`I am holding on for a long time, it is hurting future investments for Guyana’
The prospective purchaser of the Marriott Hotel Guyana has expressed frustration at the months that have passed without the conclusion of the transaction.
“I am holding on for a long time it is hurting future investments for Guyana”, Ramy El- Batrawi said in an interview with the Sunday Stabroek.
It has been seven months since El-Batrawi submitted the winning bid of US$90m in a revamped invitation for the Kingston hotel. He said that he has been waiting all the time and he plans to visit next month in relation to the closing of the contract.
Although he commended the Government for their works he says the waiting process is tedious for the closure of what would be a simple contract.
“Dragging things out makes people lose interest”, ElBatrawi, who had the highest bid twice this year for the internationally-branded hotel chain, said.
The response from the National Industrial and Commercial Investments Limited (NICIL) on closing the deal has been slow, taking months to respond to simple queries, he lamented. El-Batrawi said that this is quite frustrating since he has other investments he would like to pursue.
NICIL’s last word to Stabroek News was that the matter was being finalized.
In 2022, he came here for the first time on an exploratory trip to figure out the best investment avenues. This led him to have talks with both the subject minister and the President at which point they told him about the hotel. An eager El-Batrawi wasted no time and entered the bidding process. “The Marriott is more like a trophy property and the government doesn’t need to own this type of property since it is bit of a distraction”, he said.
He continued “in the United States we turn contracts around in weeks, latest two months”. He explained that after the bid was closed on the property it was handed to NICIL to complete the process but “6-7 months later there is still no contract to close on”.
He feels they are not motivated. “They brought in attorneys that changed things which we agreed on prior… these attorneys are not deal-making attorneys but dealbreaking attorneys”, the Egypt-born US investor said.
El-Batrawi also has his eyes on other sectors for investments in Guyana however the long waiting process to close one contract is quite mind-numbing and if the process takes any longer he may pull the plug on the deal entirely.
He was encouraged by a few reputable businessmen from around the world who encouraged him to consider Guyana as a possible investment opportunity. “The Emir of Qatar even recommended Guyana”, he said.
Upgrading
He explained that he could have started the upgrading process for the hotel if the deal had been sealed however this has set him back months and the time and money invested does not help either as ‘there are seven other hotels being built as well (and) the estimated revenue will drop”.
The businessman expressed his support for what has been described as the fastest growing economy but he said that the slow pace way of doing business does not demonstrate the seriousness of Guyana and even more so the seriousness about doing business here.
He said that he enjoys helping developing countries with their development and made the decision to focus on Guyana. He also has plans to help with the building of modular homes but the approval for lands to complete these projects has also been one that is slow.
El-Batrawi told the Sunday Stabroek that he has many plans to develop the Marriott Hotel, stating that he intends to add a casino and a tower along with modernizing the interior design, bringing the Marriott-branded hotel up to standard.
He understands the possibilities that Guyana holds and working alongside the government to shape the dream is what he hopes to do but the process being stalled with the hotel is causing him to have second thoughts about continuing to wait for them to close the process.
On September 18, NICIL said it had finalised sale negotiations for the hotel with El-Batrawi.
Responding to questions from Stabroek News, NICIL CEO Radhakrishna Sharma said that the business and operations at the hotel would continue in accord with the existing agreement with Marriott International.
“NICIL is selling its shares in Atlantic Hotel Inc. (AHI). The status quo of the business and operations of the Hotel would therefore remain the same as the new owner of the shares of AHI would continue to be bound by the terms and conditions of the said agreements between AHI and Marriott International. In other words, NICIL is selling the company (AHI) as a whole, `as is where is’, he told this newspaper.
“The Parties have completed negotiations of the principal terms and conditions of the sale. NICIL’s legal team has drafted the necessary transactional documents in that regard, and they were submitted to Mr. El-Batrawi, whose legal team has completed their initial review”, the NICIL CEO had said.
According to Sharma, El-Batrawi possessed the resources to enhance the services and appeal of the hotel to residential, expatriate and vacationing guests, and business travellers, through innovative operating within the confines of the existing agreements between AHI and Marriott International.
He said that as per the agreements with Marriott International, the Marriott brand standard will at all times be maintained.
“In our current (emerging) oil economy, the services of the Marriott Hotel will continue to cater to the needs of our local, regional, and international guests, while remaining Guyana’s flagship Hotel”, Sharma asserted.
The NICIL CEO added that all maintenance and development, structural and otherwise, will continue within the confines of the agreements between AHI and Marriott International that govern the business and operations of the hotel.
On August 17th this year, Vice President Bharrat Jagdeo had said that NICIL had accepted the US$90m bid as the winning tender and the process of finalizing the deal was underway.
He made it clear that the finalization of the deal was left to be handled by NICIL and they were supposed to be in the final phase of the negotiation process.
During a second round of bidding, X, LLC – the American investment group founded by El-Batrawi – was one of two companies that responded to NICIL’s invite in May to resubmit bids with a base price of US$85M for the sale of the Marriott Hotel.
Upping his previous bid by US$25m, El-Batrawi emerged as the top bidder following NICIL’s evaluation.
The other bidder was Integrated Group Guyana Inc which had proposed US$86.1m.
The Government of Guyana had publicly rejected the first round of bids. It held the view that all six bids submitted for NICIL’s shares in AHI for the acquisition of the Guyana Marriott Hotel came in at a figure that was not acceptable. X, LLC in the previous round of bidding had tendered the highest bid at US$65 million while Integrated Management Group – which runs the Palm Court – bid US$55 million.
NICIL had confirmed that on May 2, the six bidders were contacted and advised that their submitted bids had been rejected. At that point, the six bidders were invited to resubmit new bids with a minimum bid price of no less than US$85 million. The deadline for submission was on May 16, 2023.
The public was not told of the request to bidders to submit new bids and no official announcement was made on the fate of the bids. In the invitation for new bids, NICIL provided a listing of assets, liabilities, and payables and explained what was expected in each category on the sale of the hotel. It listed cash on hand and at the bank as $4.6 billion. A subordinated loan was listed as $3 billion and deferred income at $3.2 billion. The related parties’ liability due to the parent company was $4.4 billion.