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Sep 30, 2015

How Will B.T.L. Defray Outstanding B.C.B. Loan?

Anwar Barrow

Also hanging over B.T.L.’s head is the twenty-two point five million-US-dollar loan facility acquired from the British Caribbean Bank during the first acquisition in 2009.  B.T.L.’s board had refused to pay the loan despite decisions by the arbitration courts that the loan had to be settled. As part of the settlement with the previous owners, the Government has now paid more than twice the original amount, at ninety-seven million to BCB. Now B.T.L. must repay Government, and the government is proposing to do so through Treasury Bonds. But the adverse impact of the loan settlement passed on by government on both the value of the company, as well as the additional cost of capital charges are putting further downward pressure on profits in the future.  But the Executive Chairman Barrow says that Government is not – at least, not immediately – seeking the entire payment of the loan, which in any event B.T.L. says it cannot pay under the original or even revised terms.

 

Anwar Barrow, Chairman, Executive Committee, B.T.L.

“The Government of Belize has said to us that we need to service forty-eight million dollars out of the ninety-seven million dollars; that’s what they have said. As of this point, that is your bill and that is what you need to service. The rest of it, the balance is in an indefinite moratorium. Is that correct Mister Vasquez? So right now we have to look at forty-eight million and how we are going to finance it. With the current financing structure that is being proposed, you the shareholders are actually in a better position than you would have been had we had to service that forty-five million-dollar loan—whether under the former owners or under the government. And I’d like to explain why. When the company was taken over in 2009, as Mister Vasquez said, the loan was at forty-five million dollars. The interest payment on the loan, the terms of the loan, was at twelve percent. They had expected, the former owners, had said that they would be able to pay it in four years. Two years grace, just interest and two years principal and interest. We know that that is not practical and that is impossible because the final two years would have amounted to some twenty-five million in payments per annum, which is not sustainable.”

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