Photo: Stake Bank’s Port Coral project still under construction. (FILE photo)
BELIZE CITY, Mon. Mar. 18, 2024
Stake Bank Enterprise Limited (SBEL) is now in receivership over a considered completion risk of its multi-million-dollar Port Coral project on its 25-acre Stake Bank island located just a couple miles off the coast of Belize City. Atlantic Bank Ltd. made the administrative move on Thursday, March 14, appointing Marlowe Neal of Neal & Associates Advisory Services Ltd. as the receiver. The project is not far from completion, with over BZ$150 million having already been pumped into the island-based cruise port development by a group of creditors led by Atlantic Bank. At the time of the groundbreaking for the project in February 2019, Michael Feinstein, who is the Chairman of Feinstein Group, stated, “The bankers for this project are being led by the Atlantic Bank group. The Atlantic Bank is the lead organizer for the money for this project which is $67 million on the island and a total of about $82 million before this project is done.”
Of the three cruise port projects which have been on the horizon in the last decade and a half, Port Coral is the only one that made it to construction. However, the project missed several completion dates and its principal, Michael Feinstein blamed the Government for actions, he says, that led to the company running into financial blockades. Feinstein is a former owner of Belize Tourism Village.
As Amandala reported in August 2023, that same month, Feinstein as 1st Claimant and SBEL as 2nd Claimant sued the Government for BZ$180 million inclusive of $30 million in interest – and growing.
Stake Bank signed a Definitive Agreement (DA) with the Government in August 2017, having started the process to move the development along once more in 2012 (Feinstein dates his first moves to see a cruise terminal and tourist village constructed back to 2003 when he says former Prime Minister Said Musa gave him assurances that Government would only support one cruise port project in the same vicinity). In an affidavit for his lawsuit, Feinstein explained that construction of Port Coral faced 6 years of delay which were set in motion when GoB signed an MoU with Portico Enterprises Ltd. (named as 2nd Defendant) just 13 days after the signing of their own DA in 2017. Feinstein shared that once another port project began getting Government support, Stake Bank’s financing options began falling away.
According to Feinstein, their efforts to negotiate financing to build their cruise port and to secure usage agreements with the international cruise ship companies were derailed by the signing of the Portico MOU. Feinstein shares that when they were finally able to secure funding in August 2019 after obtaining environmental clearance for Port Coral, it came at higher interest rates. He notes that after Portico signed its DA on October 1, 2020, Portico was able to use its DA (now deemed unlawful) to successfully negotiate with the cruise ship operators the usage agreements Stake Bank itself was pursuing.
The effects of Stake Bank’s financial woes are now evident in the administrative takeover of the development. And while some may consider this move as bad news for Belize’s cruise industry which desperately needs a cruise docking facility, Atlantic Bank, we are told, is concerned with seeing the project taken to completion within the next six to nine months, at most. For that, they say another $50 million would be needed and the Bank intends to seek out creditors to source the funds as it does not intend to take up that responsibility itself. Atlantic Bank affirms that the move is in line with protecting depositors, and that the Bank faces no risk. In an interview on Friday, the PM provided further insight on that point. He affirmed that this development will not negatively affect the banking sector and shared, “… the Central Bank has been very clear and so has Atlantic Bank. They have been very clear from day one, that they are going to ensure that they protect every single cent of depositors.”
Feinstein on Friday would only indicate to Amandala that it is good that the issue is “coming to a head.” Prime Minister John Briceño on Friday told the media that Feinstein reached out to him about the matter and they are to meet this week. Speaking about the receivership, Briceño said it is a matter for the bank, and they “may have their reasons why they believe they have to put the Stake Bank project on receivership.” When asked if he thinks this development imperils Belize ever getting a berthing port, Briceño responded that he believes there will be a facility and stated, “… as we said, there are three areas. There is Stake Bank, there is Portico, and also now there is Port of Belize; and so all of that is still remaining in play, and we will see which is the one that will be able to develop into a cruise port that can meet not only the needs for today but also for 10, 20 years from today.”
Minister of Tourism, Hon. Anthony Mahler chose not to comment on these latest developments.
As to the Stake Bank lawsuit against the Government, PM Briceño said, “… from what I’m told there’s really no case. So I can’t understand why is it that they would want to sue the Government.”
PM says PBL cruise port project is not off the table
For some, the Prime Minister’s casual comment on Friday that Port of Belize remains “in play” as the potential destination for a cruise port may have gone under the radar. For others, however, it raised eyebrows. Some thought that with Waterloo Investment Holdings Limited now out of the picture after the buy-over of the port by the Government of Belize in December 2023, all plans for a cruise port at the location would have fallen by the wayside. A statement from the Government Press Office on December 7, 2023, read, “This move ends a prolonged stand-off between the so-called Ashcroft Alliance and the Government about the Port’s modernization, worker conditions and controversial plans for a cruise port at the site.”
Today, when we asked the Prime Minister to expand on his comments he said, “The issue with the Port of Belize back then, under Waterloo, is that Waterloo was not meeting the criteria that was expected from the NEAC. That was the only reason why the NEAC did not approve giving them environmental clearance. I am not saying that the Port of Belize is going to do a cruise port. I am just saying that these are the three options that we have – that we’ve always had. And if Stake Bank gets its house in order – they already have been cleared. Now, Portico is having their issues. That’s their issues; but it’s not for Government to get involved. Now, if the Port of Belize, and I’m not saying that they have, because they have not come to me with anything; but if they were, one day, to come and say, ‘Well, we do have a plan,’ believing that is a part of how they can make this work properly, and they meet the criteria that is demanded from the NEAC, and they have the cruise ship partners working with them, who am I to say no?”
