Telemedia still owes BCB forty-five million dollars
The dust appeared to have settled of late on the August nationalization of Telemedia, but the issue has surfaced head on again because of an outstanding debt of forty-five million dollars for which the British Caribbean Bank is demanding payment. Senator Godwin Hulse says that for government to acquire this loan, which would have to be paid by taxpayers, it first has to get the approval of the House and subsequently the Senate. But the Government thinks not and calls this nonsense. Before departing this morning for Trinidad and Tobago for the Commonwealth Summit, Prime Minister Dean Barrow was heard on the airwaves saying that Telemedia does not owe the bank, being British Caribbean Bank (B.C.B.), and further that he would nationalize the loan facility. That sent shock waves and prompted a quick reply. This afternoon, B.C.B. maintained that Telemedia has not made good on loan payments since it was acquired by the government in August. The original amount of the loan with the Bank back on July sixth, 2007 was for US twenty-two and a half million dollars to be paid in a period of forty-eight months to end in July 2011. And according to the Bank, Telemedia still owes approximately forty-five million Belize dollars. Michael Coye, a director of B.C.B., spoke to News Five about this latest development.
Michael Coye, Director, British Caribbean Bank
“The loan was obtained by B.T.L. to purchase shares were held by RBTT as well as to finance expansion projects and for general working capital and was issued in July 2007 and was a four year term loan.”
Jose Sanchez
“How much of that money has been paid back?”
Michael Coye
“It was set up where the first few years were interest only. B.T.L. had been making their payments up until August 2009, which is when the government acquired ninety-four percent shares in BTL through the nationalization of the company. Since then they have not been making payments and have resulted in the loan being in default.”
Jose Sanchez
“At one point you’re saying the government is saying it is in possession of the mortgage debentures. So at this point who owes? Is it the government or Telemedia that owes B.C.B.?”
Michael Coye
“Okay, right now B.T.L. owes British Caribbean Bank Limited. The issue of mortgage debentures and the loan facility itself, they are two different instruments. We have the loan facility, which was established between the bank and B.T.L. and you have the mortgage debenture which was used as security for the loan. When the government nationalized B.T.L., one of the orders that was a part of the act was that they were able to acquire or they acquired the interest in the mortgage debenture. They acquired the mortgage debenture. But there is no mention in the act or the order of the loan itself so the loan remains as is. The loan is a debt owed to the bank by B.T.L.”
Jose Sanchez
“Possibly an oversight?”
Michael Coye
“Possibly.”
Jose Sanchez
“If the government attempts to bundle this loan along with the nationalization of Telemedia through the same Act. Does this mean that you’d still have to wait for payment when they sell Telemedia?”
Michael Coye
“If they would utilize the same act and nationalize the loan to acquire the loan then the bank would have to then make a claim for compensation through the same act that they used to nationalize B.T.L.”
Jose Sanchez
“Who is B.C.B. dialoging with? Is it B.T.L. or is it the Ministry of Finance?”
Michael Coye
“Actually senior officers from B.C.B. and from our banking group have met both with the new directors of B.T.L. as well as officials of the government of Belize to try to work out the situation with the loan but nothing has really resulted from those discussions.”
Jose Sanchez
“Are you of the opinion that the bank can still have a lien on these assets of B.T.L.?”
Michael Coye
“Well, the bank would have to go through the process through the courts to recover the amounts outstanding, which it has already initiated.”
Jose Sanchez
“How much money is B.T.L. in default? What’s left for them to pay?”
Michael Coye
“Because they are in default, they are in breach of a number of covenants within the loan facility agreement, they are in full default of the principal plus all outstanding interest, which currently is about twenty-two point seven million U.S. dollars.”
The Bank also says that the Loan Facility Agreement provides for a number of “events of defaults” that include the failure to pay and any changes to the ownership structure or management of Telemedia without the consent of the Bank. B.C.B. will also continue to pursue payment of the loan. One interesting fact to point out is that British Caribbean Bank is registered in the Caribbean. So if nationalization of the debt would be the next move by G.O.B., then the question arises of how it intends to nationalize a foreign loan facility.
