In September, Baha Mar, a resort company with its headquarters in Nassau, announced that it was strengthening relations with its Chinese partners by opening an office in Hong Kong. The company has good reason to embrace the Chinese – it secured a $2.4bn, 15-year loan from the Export-Import Bank of China earlier in the year.
In a way, the loan was a form of rescue finance. Baha Mar was building a $3.5bn “mega resort” in the Bahamas and its partner, Harrah’s Entertainment abandoned the project in 2008 after the global financial crisis. But it was also a form of vendor financing. Baha Mar gave the contracting work to a mainland group, China State Construction Engineering as well as its US unit China Construction America. Moreover, 7,000 workers were sent to the Caribbean to build the hotels, golf course, casino, water park and accommodation.
“It was important for the Chinese to show that they can build complicated projects to top quality,” says Don Robinson, Baha Mar president. Baha Mar, like other companies which may have had trouble sourcing long-term, cheap and plentiful finance, has become one more recipient of capital from Chinese banks.