In light of the Government rejecting the low bids submitted for purchase of the Marriott Hotel, the National Industrial and Commercial Investments Limited (NICIL) has now set a base price and asked the six bidders to resubmit their proposals.
This is according to Chief Executive Officer of NICIL, Radhakrishna Sharma, who recently told Guyana Times that these companies were given two weeks to resubmit their lists.
“On 2nd May, 2023, all six bidders were contacted and advised by NICIL that their submitted bids had been rejected. All six bidders were then invited [to] resubmit a new bid with a minimum bid price of no less than USD85 million. The deadline for submission is on 16th May, 2023,” RK Sharma indicated to this newspaper.
Six companies had submitted bids ranging from US$25 million to US$65 million to purchase the Marriott Hotel located in Kingston, Georgetown. However, Government publicly stated that all six bids came in at a figure that was not acceptable.
The highest bid of US$65 million was received from an American investment group – X, LLC.
Among the other bidders are Pegasus Hotel Guyana, which bid at US$55.5 million; Georgetown Investments and Management Services Inc, which bid at US$50M; Muneshwers Ltd at US$25 million, Integrated Group Guyana Inc at US$55 million, and NCB Capital Markets Limited at US$33 million.
A feasibility study conducted by a Miami-based firm, HVS Consulting, back in 2010 had outlined that the Marriott Hotel is likely to be sold 10 years after its operationalisation at some US$76.1 million.
To this end, Vice President Bharrat had disclosed last month that Government decided not to sell the US$58 million Guyana Marriott Hotel to any of the six bidders since their offers are below the current market value of the profitable property.
“When we went out to tender, we were testing the market. We believe, in the Government, that none of the bids meet our price expectations and therefore, we would not proceed with any of those bids,” he posited.
The Vice President had pointed out that Government wants an appropriate offer that reflects the true value of the hotel that is currently operating at its highest profit since existence.
“The Marriott will remain in the public domain as part of the Government until we can get an appropriate offer that mirrors the true value… We know what a true value will be in the current context. So, that matter should be put to rest that we will not proceed with any of the bids because we believe that they’re too low based on the value of that asset now and its capacity to earn,” Jagdeo stated last month.
Government’s rejection of the initial bids submitted had attracted criticisms from some quarters. In response, however, the Vice President argued that Government is not obligated to accept the highest bid.
“The Government is not obligated to accept the highest bid. You have different forms of valuation. You can look at the earning capacity, you can look at the value of the asset and a whole range of things,” he stated.
According to Jagdeo, Government will not be swayed by the naysayers and will go ahead with selling the hotel at a higher price.
“First, it was a bad project, then it was a good project, then we shouldn’t sell it, then we should sell it… Now, we’re trying to get too much money for selling it… It’s this madness but along the way, we have proven all of the naysayers wrong… And, if we do sell this [hotel], it will be at a higher price… But we will prove, again, the naysayers wrong on this,” he noted at a press conference earlier this month.
In a notice back in December 2022, NICIL had announced its intention to sell the State’s shares in Atlantic Hotels Incorporated (AHI), the State-owned holding company for the Marriott Hotel.
