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Feb 17, 2014

Chairman says CGA has 2 non-performing loans with the S.S.B.

Doug Singh

Earlier we told you about the intervention by G.O.B. into the citrus industry. But at what cost…and at whose cost? G.O.B. has said that it will take over the loan facility to CPBL from the First Caribbean International Bank, and then S.S.B. will buy it from them. In addition, the CGA owes the S.S.B. nine point one million dollars, and that debt will be swapped for ten percent shares in CPBL. It’s a complicated bit of high finance, but when there is any talk of S.S.B. money, everybody pays attention. Add in the bit where the CGA currently owes the S.S.B. millions of dollars for two loans which are in arrears, and nobody’s smiling at the thought of S.S.B. shelling out more money. Today S.S.B. Chairman, Doug Singh, seemed a little shaky as he trumpeted how solid the CGA is, seconds after he revealed that they hold two non-performing loans with the S.S.B.

 

Reporter

“I don’t want to be unkind to those good gentlemen in CGA, but there is a history—regrettably—of delinquency. Some dividends, I think four million in dividends were probably paid, if memory may serve me, in 2008 and 2009. But I’m saying that if you were to look at this as a banker or if this were your own money, would you still be engaging in further debt-swaps or in a debt-swap when there is a track record of being unable to meet their commitments?”

 

Doug Singh, Chairman, Social Security Board

“Well that is something that…from the lending standpoint, you have to evaluate each situation separately. The monies that were loan under the first circumstances was for shares and is secured with guarantee from BCGA/ICL which owns majority of the shares. In addition to that, the second loan was for on-lending in the industry, for the benefit of the industry and the farmers who borrowed would repay. Now risk is risk and an industry like this has to be supported one way or the other because it requires the finances to expand, for it to grow. We are working out those circumstances now. CGA I think is fairly solid. CGA owns fifty-one, currently fifty-one percent of a company that has a net book value of over ninety-two million dollars. The fact that it is not liquid does not mean that it doesn’t have an inability to pay us on time. So perhaps you should check the numbers.”

 

PM Barrow has reiterated that no money will go to the CGA. He says that the money will be used to purchase a loan facility from the FCIB which is held by CPBL, and not the CGA. 

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