Video: Minister On Gencom Repaying $11 Million
[Updated] The Ministry of Finance confirmed that on January 29th “Gencom repaid the full amount that the Government loaned to the former employees, approximately $11 million” and “it has been agreed the Government will be reimbursed for all legal and professional fees incurred on this matter.”
This was from Minister of Finance Curtis Dickinson who was speaking a press conference this afternoon [Feb 1], with the Minister noting that “this repayment is an excellent outcome of the Government’s action which has eliminated the Government’s financial exposure in relation to the employee loans.”
Update: The live broadcast has concluded and the 9-minute replay is below
Update 3.50pm: Minister Dickinson’s remarks:
Good afternoon.
On the 23rd October 2020 the employees of the Fairmont Southampton were made redundant. At the time, the hotel ownership was unable to meet its obligation to make redundancy payments in a timely fashion to more than 700 employees, and there was no guarantee as to when the owner, Westend Properties Ltd. [“Westend”], or the ultimate owner Gencom would be able to make the payments.
This created a perfect storm of circumstances in which most of those employees, hundreds of whom are our fellow Bermudians, were already suffering financial hardship from an extended layoff due to the COVID-19 pandemic.
We cannot brag on the one hand that the backbone of our tourism industry is the people who work to provide a quality visitor experience every day and then when they need us most, leave them and their families uncertain about their futures. Action was required and the Government of Bermuda decided that it was unacceptable to allow this situation to continue unaddressed.
Consequently, the Government evaluated its legal options and employed a strategy to quickly and directly advance funds to employees. In return, the employees organized into a class to allow the Government and the employees’ legal counsel to pursue claims on their behalf.
The Government also worked diligently with the hotel’s owner to support efforts to seek financing. This was always the preferred path to an acceptable outcome.
The Ministry of Finance can confirm that on Friday 29th January, Gencom repaid the full amount that the Government loaned to the former employees, approximately $11 million. Additionally, it has been agreed the Government will be reimbursed for all legal and professional fees incurred on this matter.
This repayment is an excellent outcome of the Government’s action which has eliminated the Government’s financial exposure in relation to the employee loans.
Gencom has secured further funding to allow Westend to continue with predevelopment work at the Fairmont Southampton. Redevelopment of the hotel will provide jobs and economic stimulus. The reopening will provide a significant increase in room and meeting space inventory, which could generate visitor demand and restoration of airlift capacity.
However, the timing and extent of recovery from COVID-19 in Bermuda’s hospitality sector is difficult to forecast and subject to significant risk.
Further, while the Government is vested in and highly supportive of the redevelopment and reopening of the hotel, it must find ways to be supportive without further financial commitment as it focuses on its plan to support economic growth and balance the budget by 2023/24.
In that context, we understand Gencom is making progress with parties strongly interested in partnering to finance the redevelopment, and we wish them success.
Thank you.
