~ Aqualectra's bond in jeopardy due to losses ~
PHILIPSBURG--The bond issued to St. Maarten Harbour Group of Companies by the Central Bank of Curaçao and St. Maarten (CBCS) is "in line with the bank's investment policy," Finance Minister Hiro Shigemoto said Wednesday.
"The bond of US $150 million (NAf. 270 million) is both in keeping with the bank charter as well as the Investment Policy which has not been revoked or replaced by a new policy by the Supervisory Board," Shigemoto said.
The Central Bank serves both countries on "an equal basis," the minister said. The Netherlands Antilles ceased to exist October 10, 2010, and "everybody has to be realistic and live in the current times and not in the past."
Shigemoto confirmed receipt of two letters dated February 21 and 24 from Curaçao Finance Minister George Jamaloodin about the bond.
The bond issuance has been queried by Jamaloodin. He has sent letters to the Central bank's three statutory directors holding them "personally and collectively responsible" for the US $150 million bond. He has copied that letter to Prime Minister Sarah Wescot-Williams, Shigemoto and Governors of St. Maarten and Curaçao.
In response, Shigemoto sent a letter on February 27 to Curaçao's Prime Minister Gerrit Schotte and Jamaloodin about the NAf. 300 million bond for Curaçao's utility company Aqualectra issued in December 2009. The Central Bank had acted as an intermediary for that bond. The utility company had needed a loan of NAf. 240 million.
St. Maarten has much reason "to watch carefully" the developments in Curaçao, Shigemoto said because reports suggest that Aqualectra had NAf. 23 million in losses for 2011 and is heading for a loss of some NAf. 28 million this year.
He reminded Schotte and Jamaloodin that there are certain developments within Aqualectra which could have serious consequences for its equity and ability to meet its obligations in servicing its debt (interest and principal) from the bond issuance.
"I focused specifically on the reduction on water tariffs as well as the transfer of share capital of Aqualectra in the CUC/ Build, Own and Operate (BOO) which leads to a substantial decrease in own equity of Aqualectra."
Shigemoto said he could not rule out that the developments could "cause direct or indirect damage" to St. Maarten if such was the case. He said Schotte and Jamaloodin can then be held liable by him "for any eventual negative consequences" that St. Maarten should suffer. "It is still the Central Bank of Curaçao and St. Maarten."
Meanwhile, Shigemoto has also received a letter co-signed by Members of Parliament Patrick Illidge (independent), Roy Marlin and Leroy de Weever (Democratic Party) about the bond issuance and the Central Bank's investment policies. The questions will be answered by early next week at the latest.
The Committee for Financial Supervision CFT has also sent questions to Shigemoto about the bond and these will also be answered soon. "Hopefully, the same concern will be given to the Aqualectra bond situation by the CFT."
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