Offshore Islands

by John Francis Kinsella

It was a sad little room on the third floor over looking a narrow sunless court. In one corner stood a paperboard inscribed with the remains of a Russian lesson. It was small, hardly three metres by two, the furniture was modern cheap white lacquered fibreboard.

  Arrowsmith presented Gresinski the terms proposed by the Swedes, as usual the Frenchman was hesitant to admit the terms of a foreign organisation were without some kind of a hidden drawback, and like most of his countrymen he said ‘no’ before being pushed in saying ‘yes’.

  Arrowsmith had parked his small Renault in a public underground car park just off the boulevard Italians and walked down to the bank’s offices. The rush hour was over, the traffic had been relatively light, it was a fine dry morning in early April, a change from the previous weeks of seemingly never ending rain and cold.

  Arrowsmith wondered if the Banque de Credit National was really as serious about the business as Castlemain had tried to convince him. It was a little puzzling, as he would have thought they would have accepted Castlemain’s plans without hesitation. No doubt he pulled strings at a higher level and perhaps it was necessary to be seen going through the usual analytical procedures he reasoned.

  He was simply following Castlemain’s instruction to meet with the Irish Union’s European partner, and in any case there was nothing to lose in talking with Gresinski. Gresinski was the BCN’s home based Regional Manager for the bank’s Caribbean and Central American zone’s activities.

  Gresinski was what could have been described as an experienced Latin-American financial specialist, that was to say that he had studied and acquired an in depth knowledge of the region - as an expatriate - not from the occasional visits that usually consisted of hand shaking and lunches. However, he was still young, at the most thirty-seven or eight. He had accumulated ten years of banking experience in Mexico City and Caracas. It was a lot, since those countries had opened their doors to the presence of foreign banks relatively recently following the liberalisation of their economies.

  He spoke Spanish and excellent English. His father had been with the bank as their regional manager for many years in Mexico City. Gresinski had been brought back to Paris to persuade the bank’s customers in France to develop their business in the Caribbean.

  French businesses had been reticent to invest in that region, that is with the exception of French overseas territories, Martinique, Guadeloupe and Guyana. They lagged far behind their European competitors, they were low risk takers, mostly involving themselves in French government supported projects. The BCN had only recently been privatised and was still adapting to the change. Having been a state owned the bank had been encouraged by the government to act as an instrument to stimulate the interest of French investors in the burgeoning region.

  Gresinski knew Sierra Maestra Breweries & Distilleries; they were solvent with substantial reserves and a high growth potential, once the obstacles of the socialist regime were removed. They would be considered a good client for the bank; the question was to persuade the BCN management to give its full backing the project.

  The door opened and Gresinski appeared, embarrassed and ruffled. He was a Jew, his skin was fair and freckled, his hair was curly and a darkish red colour. He wore expensive thick tortoise shell glasses of a rectangular form that seemed to be fashionable amongst bankers.

  “Mr Arrowsmith, I’m sorry I’m late,” he flustered and going on without a pause, “please excuse this meeting room, we’re in the middle of renovations and unfortunately the other rooms are booked.”

  The place looked like it needed it, Arrowsmith thought to himself, somewhat disconcerted by the shabby reception he received. It was a fancy address situated amongst the century old head offices of the established French banks, but it was old and cramped. All the renovation they could do would not change things very much, they would still be a like a bunch of civil servants in a just recently state owned bank, in dull confined office quarters.

  Gresinski wearing an apologetic smile made a distracted effort to arrange the papers in a dossier he had placed on the table. Arrowsmith shrugged as if it did not matter, but at the same time put on a hurt look. He would take any advantage he could, however small.

  “It’s no problem, I’ll try to give a little more warning next time,” he said smiling, knowing well that he had given more than adequate notice for his visit.

  “Well let’s try and see if we’re a little better at business,” said Gresinski forcing a smile as he fumbled his dossier opened, “let me see now, Monsieur Castlemain and his partners, the Sierra Maestra Breweries & Distilleries, are looking at a new tourist complex at Cayo Saetia in Cuba. I have a report from our Havana representative, which I can tell you is very positive,” he said with a certain relief.

  “That’s good to hear.”

  “Yes, Cayo Saetia will be a good bet for some time to come…providing the scares about Fidel’s political and economic policies don’t get to much international press!”

  Arrowsmith frowned.

  “Don’t worry, it’s not the case for the moment, the Cuban government seems to be taking the right measures to avoid any exaggerated reports.”

  Arrowsmith had read articles in the press; he had even seen television reports on the subject, but had never considered it as a real problem in terms of business. It had become a media fad to project the end of the reign and after-Fidel scenarios.

  “What about the bank?”

  “Us! That’s not our immediate concern, we are looking to the future, Cuba appears to be a reasonable bet in the tourist sector, at least at the moment, that’s what we describe as a risk assessment question, linked to a global appreciation of all the other risks involved. But, the situation could become much more acute if public opinion was excited. But don’t let’s worry about that for now, after all France has had terrorist and other problems and the tourists still keep coming,” he smiled.

  “Good, I see your point,” Arrowsmith made a mental note of Gresinski’s comments.

  “Our investment committee has given a favourable opinion on an eventual participation in the loans for the project, subject to a finalised list of the other financial partners involved.”

  Arrowsmith confirmed the availability of Sierra Maestra’s own funding possibilities together with that of local banks. He reiterated the Irish Union participation in the loans, and their contacts with the Canadian group.

  “Do you know Prestige?” asked Gresinski.

  “Prestige? No.” Arrowsmith shrugged.

  “Prestige is a French financial group whose principal interests are in a number of top hotels and tourist complexes. They have a large part of their investment in the French West Indies and Polynesia.”

  “No I don’t know them, why?”

  “They’re one of our clients, a good one at that,” he paused hesitatingly, “they’re looking for participation in new projects in those geographical areas where they are not presently established…and also, I say this in the strictest confidence, possible partners in their new venture in the Caribbean.”

  “I see,” said Arrowsmith noncommittally.

  “As I said they are good clients of the BCN and it is possible that their association in the type of project you are looking at would give a French flavour, that could tilt the loan participation in the right direction!”

  Arrowsmith recognised the direction in which Gresinski was pointing him, it was not unusual of French banks to involve French businesses in projects that looked promising. It was a service both to themselves and their clientele, ensuring new markets without the development costs, involving a French partner who they knew well and were an additional source of guaranties, who could keep them in close contact with the development of the business.

  It was not up to him, it was a question for Castlemain, and after all it had been Castlemain who had directed him towards Credit National. It would not do any harm to learn more about Prestige, it could even be useful.

  Gresinski looked enquiringly a
t Arrowsmith, who was deep in thought, weighing up the potential advantages and disadvantages of a new partner. In his experience the more partners the more complicated the business became, especially in the initial stage, but if it was necessary to make the BCN happy then it would have to be considered. In any case sooner or later other partners would have to be introduced, the scale of the project imposed that.

  “Look, why don’t you let me arrange a meeting with the Jean-Louis Brel, he’s the president of Prestige.”

  “Why not? I think it could be interesting.”

  “Good!” Gresinski said visible relieved.

  Prestige’s offices were in an elegant late nineteenth century building that overlooked the Parc Monceau in a plush district of Paris. Arrowsmith was shown into Jean-Louis Brel’s office on the ground floor. The office was large and airy; the French windows were opened onto the private garden that separated them from the park. Brel’s office was furnished in ships style, with dark mahogany furniture and bookcases, adorned with antique ship’s instruments and brass fittings, old maps and charts in elegant frames decorated the walls.

  “Mr Arrowsmith please come in,” said Brel placing his heavy pipe in a heavy yellow bohemian crystal ashtray, “it’s very nice of you to take the trouble to come to see us,” he said in excellent English.

  “A beautiful office you have Monsieur Brel.”

  “Thank you, to be honest I’ve never really thought of it as an office,” he said taking Arrowsmith by the elbow and guiding him towards the French windows, where he could admire the garden. They stepped outside onto the flagstones of a path that wound its way around the flowerbeds and shrubs towards the tall ornate iron railings that separated the garden from the park.

  “It must be very relaxing to work in such a work environment,” said Arrowsmith.

  “Most of the time,” Brel laughed, “let’s go in I think it might be a good moment for some coffee, or perhaps you prefer tea, what do you think?”

  Arrowsmith looked at his watch unconsciously, it was just after eleven, a coffee would be fine.

  “So you’ve talked to our good friend Gresinski at the BCN,” he did not wait for Arrowsmith to reply, “he’s been very helpful to us with the extension that we’ve just completed in Tahiti...very competent and reliable.”

  “I know BCN through our Irish bankers the Irish Union.”

  “Yes of course, a fine country.”

  A secretary served two strong expresso coffees and left them.

  “As you know Prestige is specialised in the tourist sector, up market hotel business. Recently, that is in the last four or five years we have entered into the time-share business. We’ve been very successful, very profitable,” he said with a certain satisfaction, concentrating in what seemed to Arrowsmith to be a kind of homage to the word ‘profit’.

  “We have decided to expand this area of business and are in the process of acquiring a site in Guadeloupe that we will develop into a hotel and time-share complex.”

  Arrowsmith nodded, that was what Gresinski had already broadly explained to him, Prestige was engaged with a local company called Caribbean Property Development. Brel went into the details of his firm’s business.

  “We are also seeking involvement in other tourist areas...in Cuba for example!” He continued concentrating, scribbling on the corner of a note pad with a gold pencil, he suddenly stopped and looked directly at Arrowsmith as if he expected a reaction.

  Arrowsmith held back giving no particular sign of interest and waited for Brel to continue.

  “What about you, tell me a little of your business plans?” Brel smiled.

  “Well, I think I can safely say that we have certain ideas in common, that is to say the people I represent, the Irish Union Bank and their partners the Sierra Maestra group in Cuba. Our project, Ciscap as we call it, is advancing nicely. The Cubans have started to accumulate good experience in operating tourist hotels and complexes, but they are rather limited in marketing, we believe that there is a huge potential in the new concept for the project we are developing.”

  “Let us continue over lunch, I’ve taken the liberty of booking a table at the George V, if that suits you, my driver is waiting for us,” Brel said smiling and glancing at his watch.

  Ten minutes later Brel’s Jaguar pulled up at the extravagantly refurbished George V and he led Arrowsmith into the hotel. The style was not to Arrowsmith’s taste, too pompous, but it was clear that Brel was a regular from the deferential welcome he received from the restaurants maitre d’hôtel, who led them to a table that that offered a good view of restaurant but was at the same time discrete.

  Brel was what could be described as an anglophile, one of those Frenchmen who admired all that was traditionally upper class British. He was a snob and affected the imaginary style of an English gentleman. He had built up his company Prestige from a modest house building enterprise that had started out in the suburbs of Paris twenty years previously. Progressively, with the long boom in the French property market, he had built his profits on the capital gains made from generous bank loans and the willingness of home buyers to pay prices indexed on the cost of construction during a high inflationary period.

  Prestige went from individual homes to housing schemes and apartment blocks and then into commercial property. It was through the latter that he went into partnership with an old friend, Xavier de Montfort, an investment consultant, to build his first hotel in Guadeloupe, with all its fiscal advantages. It was a hotel residence offering the traditional hotel service or accommodation from the simple one-room studios with a kitchenette for basic self-catering to luxury multi-bedroom apartments.

  The development had profited from several regional grants offered by the French government, linked to a number of tax breaks and other fiscal advantages for the investors. Prestige was riding high even though its financial management could not have been described as exactly tight, by international standards their accounting practices were somewhat slack, fortunately the inflationary tendencies of the market took care of cost overruns.

  Brel lived in style, a twelve-room hôtel particulière, as the French called their fine Parisian town houses, located in the chic sixteenth arrondissement. Summer weekends he could be found at his house near the golf course at Deauville, or, in the marina at Port Grimaud on the Côte d’Azur where he kept a sailing yacht.

  He was basically of a conservative nature and the dynamism that had pushed him as a younger man had faded into a comfortable complacency, based on the certainty of continuity without risk. That spring morning as he followed the CNN reports of the mopping up operations in the Balkans following the victory of the Americans and their allies and the establishment of a new order. Brel could not see any looming economic recession on the horizon and for that matter nor did the markets.

  Brel’s meeting with Castlemain was an instant success, he was seduced by Ireland and Castlemain’s lineage, a high class country gentlemen, but above all by his banking background and excellent business relations. Brel saw Castlemain as a solid source of financing and Castlemain recognised Brel’s knowledge and experience in the hotel construction business.

  The Irish Union was Brel’s idea of a perfect partner, with its president David Castlemain, who he imagined would let him get on with the real business, building a first class tourist establishment.

  The situation that presented itself was an ideal opportunity for the Irish Union, which could use Prestige’s experience for the Cayo Saetia development, and would at the same time acquire an unexpected partner in the Caribbean market.

  A co-operation agreement was drawn-up and a study was confided to the Irish company to investigate the pooling of construction and financing resources for the project to be developed jointly by the two groups.

  Caribbean Property Development, long-standing business friends of Castlemain, with the backing of Prestige were putting together a luxurious new development for a hotel and time-share development in Guadeloupe. They
were on the point of acquiring a splendid new site nearby Gosier, which would however require some considerable investment and landscaping, after the run down properties that occupied the site had been demolished.

  The time-share units would sell like hot cakes in a market that had never been better. The financing however needed some original ideas as they had recently experienced some difficulty in raising new capital, nothing serious but there was increasing competition for money in the buoyant property development market.

  To find fresh capital resources they needed a new partner, in preference a partner experienced in property development in the Caribbean, that was perhaps to much to hope for, however when the Canadian entrepreneur, Ivan Garcia, indicated his intention to participate once the details were settled, it removed all the problems, that is to say with the exception of the last parcel of land which remained to be acquired. It was nothing more than a detail that would be soon taken care of.

  Chapter 57

  The Red Arrow