Marriott Hotel sale: Terms and conditions already negotiated – NICIL Head

…says documents being reviewed before final signing

Radhakrishna Sharma

The National Industrial and Commercial Investments Limited (NICIL) has already wrapped up negotiations on the terms and conditions for the sale of the Marriott Hotel with potential buyer, American businessman Ramy El-Batrawi.
El-Batrawi’s company – X, LLC – had emerged as the successful bidder with his US$90 million proposal to buy the hotel during the public tender process.
Chief Executive Officer of NICIL, Radhakrishna Sharma recently told Guyana Times that the transactional documents are currently being reviewed.
“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 the successful bidder, Mr. Ramy El-Batrawi for review by his legal team,” Sharman noted.
Parallel to this, the NICIL Head explained that El-Batrawi’s team has commenced their own due diligence exercise, which is expected to be completed before signing. The signing, according to Sharma, will take place after the “complete review” of all the related agreements and transactional documentation.
Meanwhile, throughout the negotiation period, the Guyana Government was informed of the progress and had given the greenlight to the terms and conditions agreed to.
“In principle, all negotiated terms and conditions were approved. A formal approval from Cabinet will be done before the sign off of the agreements by both parties,” Sharma related to this publication.
Last month, Vice President Bharrat Jagdeo had disclosed that Cabinet had granted its approval for NICIL to go ahead and engage El-Batrawi’s company for the sale of the Marriott Hotel, which is located in Kingston, Georgetown.
X, LLC is an American investment group founded by El-Batrawi. The company’s website says its primary focus is to invest in, and enhance, target industries.
During the initial bidding round, X, LLC had submitted the highest bid of US$65 million. Among the other bidders were Pegasus Hotel Guyana, which bid at US$55.5 million; Georgetown Investments and Management Services Inc, which bid at US$50M; Muneshwers Ltd, which bid at US$25 million; Integrated Group Guyana Inc, which bid at US$55 million; and NCB Capital Markets Limited, which bid at US$33 million.
In April, the Guyana Government said the bids received were “too low”, and decided not to pursue any of them. NICIL then wrote the six companies, informing them that a base price of US$85 million was set, and as such, recommended that they resubmit bids reflecting this new figure.
However, only two of the six companies responded by the May 16, 2023 deadline. New offers were received from X, LLC at US$90 million and Integrated Group Guyana Inc at US$86.1 million.
After an assessment of these two bidders, the decision was taken to go ahead with El-Batrawi’s US$90 million bid.
VP Jagdeo argued at the time that if the Government had gone ahead with any of the first set of offers submitted for the Marriott Hotel, then it would have lost out on as much as US$35 million in revenues from the sale of the property.
The Guyana Marriott Hotel, which opened in 2015, was constructed to the tune of US$58 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 ten years after its operationalisation at some US$76.1 million.
Jagdeo has insisted that the Marriott Hotel would not be sold until an “appropriate offer that mirrors” its true value is made.
But the 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.
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.
AHI is the NICIL special purpose company that fully owns the 197-room hotel, whose financing structure had depended on a casino and entertainment centre to make enough money to repay up to US$30 million in debts to the banks and other creditors.
Those add-ons to the hotel were scrapped. The hotel opened in 2015, the same year ExxonMobil first found oil in Guyana’s waters, and has since gone on to play an important part in Guyana’s developing oil and gas sector. It is used to accommodate local and overseas offshore workers, as well as serve as a prime venue to host numerous private and State-sponsored events.
It was against this backdrop that the Vice President argued that now is the right time to sell the hotel, which is currently operating at a profit even without the casino and entertainment centre add-ons.
“Now it would be best to sell the Marriott off. You could probably maximise the price that you will get when it’s profitable, and before the seven new hotels that are privately [being] built, that are international brands, come on the market…within a year or two,” Jagdeo previously stated.
The construction of the Marriott Hotel, which started in 2011, had sparked widespread controversy. At the time, Jagdeo was the President, and his Administration had faced heavy criticism over the use of taxpayers’ money to finance the hotel. But Jagdeo has always defended the decision.
“The Government didn’t need to own a hotel at that time, but the era was that we were not getting new hotels built, and we had to trigger the investment… There is no particular supreme benefit to Government owning [the hotel],” he has emphasised.
According to the Vice President, the hotel is operating at a profit and provides some 500 jobs to Guyanese, directly and indirectly. He insists that selling the Kingston, Georgetown hotel now would bring in “maximum value” to the State, that could go towards triggering other investments in the country.