US$120m will get Four Seasons going
The second round of financing for the Four Seasons project – over US$120 million – is due to be completed within a few months, according to Professor Avinash Persaud, executive chairman of Paradise Barbados Limited, the body representing stakeholders involved in the project.
Persaud said that the financing plan was always in two parts. “The first part was a Government-guaranteed loan of US$60 million which was disbursed last November from ANSA Merchant Bank in order to stabilize the company and once stabilized, the second part was a package of new debt and new equity amounting to more than US$120 million.
“Now that the company is stabilized, the additional US$120 million debt and equity will come from the private sector.”
He said the new finances would allow the project to start building the hotel without waiting on or even relying on villa owners to sign up.
The international economist further noted that “as long as the guarantee continues, Government will have a ‘golden share’ in the project which requires Government approval before the company can make any material changes to the assets and the overall plan, while keeping out of day-to-day operational aspects”.
Persaud added that he was “hoping to keep the project from being tangled up in politics as far as possible”.
The Four Seasons project is expected to be a major employment generator when it gets into full operation later this year and should provide opportunities for both large and small contractors.The multimillion-dollar project is scheduled to have a hotel and villa segments.
Speaking about Government involvement in projects more widely, Professor Persaud said that “in general, governments are not, for all kinds of sensible and obvious reasons, good managers of essentially private activity like hotels”.
“They could play the role of nudging something to happen, owning a bit of equity or playing a catalytic role for stuck projects, but day-to-day operations are best left to managers that could be hired and fired for bad performance,” said Persaud.