EVEN with a “good” occupancy rate, the controversial 197-room Marriott Hotel is currently unable to service its loan, Chief Executive Officer (CEO) of the National Industrial and Commercial Investments Limited (NICIL), Horace James, has said. James’s revelation was made on Friday during an end-of-year press conference held at NICIL’s boardroom, Kingston.
The Marriott Hotel, which is a US$30M investment by the Government through NICIL, is owned by Atlantic Hotel Inc. (AHI) and was reported to have been financed by a US$27M loan raised from a consortium of businesses.
It was also reported that Republic Bank had assumed responsibility for managing the loan, which with interest and other costs, would see the hotel repaying US$26M in 26 installments.
According to James however, at a recently held Annual General Meeting (AGM) for The Marriott, the Board of Directors disclosed that the hotel was unable to service its debt.
“They [the board] say they are not able to service their debt,” he said, adding that there are still some outstanding loans from Republic Bank that the hotel might be able to access.
However, the CEO pointed out that AHI would “obviously” need to revise its plan to access those loans. He added too that he believes this process of revising the plan has begun.
In relation to the hotel being unable to service its loan though, James said that this is not a result of low occupancy rates. In fact, he reasoned that the “occupancy rate is good,” and that the financial woes with the Marriott are not a result of the operations of the actual hotel.
He posited rather, that the additional revenue the hotel could have been generating from its Entertainment Complex and Casino, is not there. As such, James noted that the board has expressed its intention to have the Entertainment Complex and Casino up and running at the soonest possible time.
“We attended the AGM for Marriott a few weeks ago and the board believes that is the way to go, in terms of the entertainment centre and that should be able to get [them] through the financial hurdle. They are hoping to make a decision to get the entertainment centre running,” he said.
Meanwhile, to deal with the hotel’s inability to service its loans, James said that both the Minister of Finance and Republic Bank have been informed about the situation. He added too, that NICIL remains hopeful that the Finance Minister will be able to assist in this area.
When quizzed however, the CEO could not say what amount is due at the end of this year.
Meanwhile, he revealed that approximately 30 entities currently owe NICIL for services provided to them. Sitting in the top bracket of that list is the Ministry of Public Infrastructure, which currently owes $174M for Battery Road,which leads up to the Marriott . The Central Housing and Planning Authority (CH&PA) owes $74M for work done at Sparendaam, while the Guyana Sugar Corporation (GUYSUCO) owes $61M for rental of a property at 199 Camp Street. Bobby Ramoop’s New GPC (Guyana Pharmaceutical Corporation) also owes NICIL over $5M and has been written to about this debt.