The Heads of Agreement between the Bahamian Government and the Developer behind Albany Golf & Beach Club was signed in November  at The Cabinet Office in Nassau. Construction of Albany Golf & Beach Club is scheduled to begin immediately with plans for the community to open in the fall of 2008.
UK tycoon Joe Lewis loses $800m on Wall Street
Bear Stearns on brink of break-up
JOE LEWIS, the secretive British billionaire, has lost an estimated $800m in the collapse of the American investment bank Bear Stearns.
The 71-year-old currency trading tycoon, who runs his empire from the Bahamas, holds almost 10% of the bank’s shares. Bear’s shares fell 40% on Friday to $27, after it secured a 28-day credit lifeline to stave off collapse.
Lewis began building a stake in Bear last September, when the shares were changing hands for more than $100.
The huge paper losses could force Lewis to sell out of some of his other positions, according to traders, in order to meet margin calls from his lending banks.
Bear Stearns stands on the brink of collapse or break-up this weekend. The bank’s woes come as Wall Street braces itself for another week of pain.
Some of America’s biggest financial institutions are set to announce first-quarter figures showing fresh losses and write-downs of billions of dollars.
The disclosures come amid desperate attempts to bail out Bear Stearns, which secured a 28-day lifeline on Friday to stave off collapse. That would have caused a sale of Bear’s $42 billion (£21 billion) of loans and $176 billion of securities that could have triggered a meltdown in the financial markets.
On a Friday conference call, Bear’s chief executive Alan Schwartz said the bank was considering a full range of options – a statement many took to mean the bank is on the block. Lazards is advising Bear on its options.
JP Morgan Chase has stepped in alongside the Federal Reserve Bank of New York to provide emergency funding.
Jamie Dimon, JP Morgan chief executive, is interested in Bear’s prime brokerage business and parts of its mortgage operations, according to sources.
“Bear Stearns is over,” said one banker. “By the end of the month – if not this weekend – someone is going to come up with a plan to take it out or break it up.”
Wachovia, the giant American retail bank, is also said to be interested in parts of the business and so is JC Flowers, the private-equity group that attempted to buy Northern Rock.
A takeover is not expected to place a high value on Bear Stearns shares, which lost almost half their value on Friday.
Richard Bove, a banking analyst at the Punk Ziegel investment bank, said he thought a buyout was likely to fail, as it did with Britain’s Northern Rock. “I don’t think the Fed will approve a purchase,” he said. “Customers are leaving in droves, so what would they be buying?”
Bove said Bear was “a new Northern Rock” that would be propped up by the government as it dwindled away. He predicted the bank will limp on, losing clients, until it ends up being a regional broker.
Bear’s woes come as its blue-chip rivals prepare to announce first-quarter results. Analysts have cut their 2008 earnings outlook for Bear Stearns, Goldman Sachs, Lehman Brothers and Morgan Stanley. Bove said the results were less important than the strategy the banks were now following. “We have a totally mismanaged economy in America and that has been allowed to happen because the rest of the world accepted our debt.
“Well that’s over and now, like a banana republic, we are going to have to prove we are sorting out our act.”
The Bear Stearns crisis has reinforced the view that the Federal Reserve will cut interest rates this week by 0.75 percentage points, rather than 0.5, which would take the Fed Funds rate down to 2.25% – three points below last year’s peak.
Some analysts even think that the Federal Reserve may try to calm the markets by cutting rates by a full percentage point at its Tuesday meeting.
“We now expect the Fed to cut by 75 basis points on March 18, 50 in April, 50 in June and by a final 25 in early 2009, bringing the Funds rate back down to 1%,” said Ethan Harris, an economist with Lehman Brothers. “Who says history does not repeat itself?”
In Britain, nerves could be set on edge if the February inflation figures – also due out on Tuesday – show a decisive rise above 2.5%, from 2.2% in January.
While Mervyn King, the Bank of England governor, has primed the markets to expect a significant rise in inflation in the coming months, any sign that it was moving higher at an unacceptable pace would be seen as limiting the Bank’s room for manoeuvre on interest rates.
BANK LOSSES KEEP RISING
GOLDMAN SACHS is this week expected to reveal write-downs of more than $3 billion, as Wall Street begins another turbulent quarterly reporting season.
Huge loans for private-equity deals, coupled with a loss on its holding in the Chinese bank ICBC, are behind the write-downs. Goldman is also expected to unveil a 60% drop in earnings.
Lehman Brothers, which secured a new $2 billion credit line on Friday, is expected to reveal write-downs of more than $1 billion.
Morgan Stanley, meanwhile, is poised to reveal a further $500m in write-downs.
Bear Stearns will now publish its results tomorrow.