~ Management Board and Supervisory must be re-screened, Dutch demanding CFO position, Project will cost PJIAE $2M ~
PHILIPSBURG: --- The delegation that went to New York on March 26th, 2019 to meet with the bondholders to renegotiate the loan agreement for the Princess Juliana International Airport (PJIAE) failed miserably as they basically sold out the country’s asset to the bondholders and the Dutch Government.
SMN News learned that the Government of St. Maarten has agreed to commit all money earned at the PJIAE to the bondholders, money derived from the Airport Departure Fees (ADF) while PJIAE will no longer have a bank account on St. Maarten since the bondholders has lost trust in PJIAE management and the local banks namely RBC. All funds must be deposited in a bank in New York which will be chosen by the bondholders.
SMN News learned that the bondholders chose to hold PJIAE management accountable for the USD 10M that was in the account at RBC bank, that money SMN News understands was used by the management team to conduct repairs at the Terminal Building for operations of PJIAE to move back into the building. It is understood that the bondholders are of the opinion that the money should not have been touched since they are in full control of PJIAE finances as there is no agreement with the Government of St. Maarten since the passing of hurricanes IRMA and MARIA as the Government of St. Maarten had failed to provide PJIAE with a letter of guarantee that was supposed to be submitted to the bondholders by October 2018. Bear in my mind that PJIAE is currently in default with their loan with the bondholders.
The bondholders have agreed to release the $54M insurance money to PJIAE if they are provided with a construction schedule. While management and the Supervisory Board of PJIAE must report to the bondholders on a monthly basis instead of every three months. PJIAE reporting on a monthly basis has to do with their financial transactions, money that was deposited each month and the monthly expenditures. Management of PJIAE will have to itemize their spending to the bondholders for them to touch the insurance money when it is released.
The Government of St. Maarten has to guarantee any shortfall in excess of USD20M, as they have now agreed to increase the bridge load from USD 15M to USD 20 M. This money will be used to cover the shortfall during the construction period of 24 months. This include salaries, and other general expenses. The Government of St. Maarten also must cover the shortfall for the past 18 months which could be close to USD 20M.
Despite the harsh reality, PJIAE is now facing the Dutch Government has only committed itself to the USD 100M which was agreed upon previously. Based on the agreement the Government of St. Maarten signed off with the Dutch Government PJIAE will receive USD50M through the World Bank which will be given to the Government of St. Maarten and they will loan it to PJIAE. Another USD 50M will be coming from the European Investment Bank (EIB). PJIAE must pay back these loans at 4.45% interest rate over a 20-year period.
Dutch Government Demands.
Meanwhile, the Dutch Government is demanding that the management board such the Chief Executive Officer (CEO) Brian Mingo and the Chief Operations Officer (COO) Michel Hyman be rescreened. Members of the Supervisory Board members must also go through re-screening.
The Dutch Government also wants the Chief Financial Officer (CFO) position that is currently available to which the Government of St. Maarten has agreed to as a pre-condition for the USD 100M loan.
The Dutch Government gave the Government of St. Maarten a pre-condition to the USD 100M by demanding the CFO’s position, they have insisted that a CFO from Schipol Royal Group is appointed and that the selection process is bypassed.
The three-day meetings held in NYC comes with a hefty price tag since PJIAE must pay their New York-based lawyers $200,000.00 for the three-day meetings with the bondholders and they have also committed themselves to pay an additional USD2M for the legal fees for the re-writing of the new loan agreements and a Memorandum of Understanding.
While all of the above-mentioned agreements were made with the bond-holders and the Dutch Government. The Dutch Government through the World Bank may only be ready to sign off on loans by the end of May early June 2019.
SMN News further understands that this agreement that the Government of St. Maarten has agreed to may very well cost them their offices as politicians from all factions in parliament are furious over the decisions were taken by the UD/SMCP coalition Government.