Home Top Stories Sale of Marriott Hotel: Govt will retender or keep hotel if deal...
– says “not desperately looking to sell”
The Guyana Government is now weighing its options after United States businessman, Ramy El-Batrawi, who had put in the highest bid to purchase the Guyana Marriott Hotel, has passed away – possibly putting the deal with his company, X, LLC, in limbo.
In May 2023, X, LLC emerged as the successful bidder with a US$90 million proposal to buy the Marriott Hotel located at Kingston, Georgetown.
Apart from X, LLC, the only other company that submitted a proposal in the second bidding process was Integrated Group Guyana Inc., which had put in a US$86.1 million offer to buy the hotel. The government had chosen the highest bid to sell the hotel.
Since then, the company has been in negotiations with the Government through the National Industrial and Commercial Investments Limited (NICIL) to iron out the sale terms and was expected to sign the contract soon.
However, El-Batrawi passed away on Tuesday, April 23, at the age of 63. 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.
Only in March, the Egyptian-born American businessman told a local newspaper, Stabroek News, that he would be in Guyana this month to “conclude the deal.”
But news of his death had sparked uncertainties on the sale of the hotel to El-Batrawi’s company.
According to Vice President Dr. Bharrat Jagdeo at his press conference on Thursday, the government may now have to engage the second highest bidder with the US$86.1 million offer.
“We may have to invite that company (Integrated Group Guyana Inc.) to see if you can conclude an arrangement with the second [bidder],” Jagdeo stated.
Since there is a ‘validity period’ during which the bid is expected to be completed, the Vice President explained that if they are unable to wrap up this deal then the government could possibly go out back to tender for a third time or altogether keep the hotel.
“…The government may decide to go back out or just to keep the hotel. There is no rush to conclude anything here because we’re not looking to desperately sell,” he posited.
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.
During the initial bidding round early last year, 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 had 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.
To this end, Jagdeo has insisted that the Marriott Hotel would not be sold until an “appropriate offer that mirrors” its true value is made.
In a notice back in December 2022, NICIL 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 had 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 stated last year.
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, which could go towards triggering other investments in the country. (G-8)
