By Tim McLaughlin From Reuters

The troubled $3.5 billion Baha Mar resort project in the Bahamas is preparing to wind down operations and cut more than 2,000 jobs if the developer fails to strike a deal quickly with its main lender, China’s Export Import Bank, according to U.S. bankruptcy court filings.

The sprawling Baha Mar resort, developed by Sarkis Izmirlian, the son of an Armenian billionaire, had ramped up hiring earlier this year in anticipation of a March opening. But after missing that deadline, a cash crunch forced Izmirlian’s Baha Mar Ltd to file for bankruptcy protection on June 29 in what was also a setback to China’s ambitions in the region.

The resort is 97 percent finished, but there is currently not enough money to complete the rest. Construction has been suspended for several months, court records show.

“If an agreement with (China’s Export Import Bank) is not reached in the near term, the debtors will be compelled to immediately downsize their operations to a minimum over approximately 45 to 60 days,” Baha Mar Ltd said in court documents filed this week.

A communications officer for China’s export import bank declined to comment for this story.

Before filing for bankruptcy, Baha Mar employed more than 2,400 people, with a monthly payroll expense of $7.5 million, court filings show.

Baha Mar Ltd said the Chinese bank refused to advance the remaining $112 million under a $2.45 billion loan that bankrolled most of the project.

The developer blamed its construction delays on main contractor China Construction America. A unit of China State Construction Engineering Corp Ltd, CCA said Baha Mar Ltd mismanaged the project.

If Baha Mar cannot work out a deal with the Chinese bank, it will have to secure a new source of financing with a goal of completing construction and opening the resort, which would have more than 2,000 hotel rooms and a Las Vegas-style casino.

A fully operational resort would employ about 5,000 people and boost the slack economy of the Bahamas.

Meanwhile, the developer is asking a U.S. bankruptcy judge in Delaware to approve an incentive plan that, in part, would pay a group of nearly 100 employees about $4.9 million in bonuses and salaries to retain their services, court filings said. (Reporting by Tim McLaughlin; Additional reporting by Shu Zhang in Beijing; Editing by Richard Valdmanis and Lisa Von Ahn)

For more on this story go to: http://www.reuters.com/article/2015/07/16/china-bahamas-resort-idUSL2N0ZV2YY20150716?feedType=RSS&feedName=bankruptcyNews

IMAGE: (courtesy Baha Mar)