PM says arbitration award is win for Belize, but it is not final
Posted: Wednesday, May 11, 2016. 9:41 p.m. CST
By Aaron Humes: Prime Minister Right Honorable Dean Barrow on his return from his latest medical trip abroad today said that the final arbitration award deciding the value of BTL shares at the time of Government’s first nationalization in 2009 can be viewed as a victory for the Government and people of Belize.
He affirmed that when the deal is finalized it would have been money well spent given that the company is now majority state owned. He told other media that what the arbitration panel has done is offered an outline of their core findings.
Both sides are now tasked with reviewing the valuation method and quote unquote see if the math adds up. Barrow added that while it is not yet final, it is a clear indication of what it is likely to be.
The Ashcroft alliance wanted 10 Belize dollars per share but the Government’s own NERA evaluation put the value of shares at 1 dollar and fifty cents. The indication is that the number now set per share is around 5 dollars and 50 cents.
Barrow today said quote, “They have come down a little under the midpoint valuation which is good for us and 60 percent of what they are indicating the award is likely to be is going to be attributable to the accommodation agreement. So since as you know, I had agreed with Lord Ashcroft that any portion of the award that is attributable to the accommodation agreement will be in Belize dollars and must be spent in this country on projects to benefit the people of Belize, that also is good news. So all that will go out is 40 percent of the award. Our US dollar liability is therefore limited to that.” End quote.
As to where the government will find the money to make the payment, Prime Minister Dean Barrow said that they will have to borrow domestically since they have already raised the legal limit of treasury bills. Barrow did confirm that under the agreement, they will only pay half of it immediately and then they have a year to pay the balance.
A Government press release issued this evening adds that the draft decision was released to the parties in confidence and GOB had been awaiting the final ruling before publicizing the details. However, since some details of the draft decision have been circulated to the media, GOB feels obliged to put out a statement. The draft mainly concerns the valuation of the shares nationalized in August of 2009.
From the draft valuation of $5.60 per share, only 40% or $2.24 is directly attributable to the share value which is only $0.80 more than what GOB offered. GOB sold those shares for $5.00 per share.
The additional amount being paid that is attributable to the Accommodation Agreements is $3.36 per share or $151M which will be spent in Belize on local projects. Since acquisition, dividends earned by GOB should be sufficient enough to offset the award of Interest and possibly costs.
GOB says it has already paid $65 million towards compensation. GOB and the Belize Social Security Board had loaned Sunshine Holdings $20 million for the purchase of shares back in 2005 and these loans were never repaid. The compensation payment, therefore, will be reduced by another $20 million
The release closes by stating, quote, Government looks forward to the final award ruling on this matter so that we can all put behind us the PUP era of secret contracts and bad deals that threatened the economic development of our country. End quote.
Looking for Internet marketing, social media presence and direct email exposure to a Belizean oriented market of over 500,000 individuals every month? Breaking Belize News is able to offer a marketing package that uses internet, social media and email to reach over 500,000 Belizean-centric potential customers each month.
Email us at firstname.lastname@example.org for more information.