The developer of the mega Baha Mar resort and casino complex in The Bahamas has filed for Chapter 11 bankruptcy protection, initiated “in order to complete construction and open Baha Mar as soon as practicable.”
According to a release, the board of directors determined that due to the financial consequences of the repeated delays by the general contractor, and the resulting loss of revenue, the Chapter 11 process is “the best path to provide the time to put in place a viable capital structure and working relationships to complete construction and successfully open Baha Mar.” The voluntary Chapter 11 filing has been made in the U.S. Bankruptcy Court for the District of Delaware. Baha Mar Ltd. will be filing an application in the Supreme Court of The Commonwealth of the Bahamas seeking approval of the U.S. court orders.
Baha Mar’s developer, Sarkis Izmirlian, has agreed to arrange the funding for the Debtor-in-Possession (DIP) financing facility. This financing will, among other things, enable Baha Mar to operate and meet its financial obligations in the interim during the Chapter 11 process. Specifically, the total DIP facility is up to $80 million of which up to $30 million will be utilized by Baha Mar over the next 30 days.
Izmirlian stated, “I am committed to doing all I realistically can to move Baha Mar forward to be completed and opened successfully. I am confident that, once opened, Baha Mar will be a world-class destination resort that will attract guests from around the world and serve as a key economic spark plug to The Bahamas. The Chapter 11 process provides the appropriate venue to create a viable financial structure that places Baha Mar’s interests foremost.”
The Melia Nassau Beach resort will continue to operate normally during the Chapter 11.