PHILIPSBURG–Princess Juliana International Airport (PJIA) no longer has to repay the US $5 million emergency loan it received from Government coffers in January to pay employee salaries, and will breathe a sigh of relief now that Finance Minister Perry Geerlings has signed the agreement for it to receive an additional $15 million bridge loan.
According to a press release from Geerlings’ cabinet on Tuesday, he signed the documents last week Thursday and said on Monday that the governments of the Netherlands and St. Maarten have also reached an agreement for the Dutch Government to repay the $5 million emergency loan.
Originally, PJIA was expected to repay the $5 million once it received the bridge loan. The government of St. Maarten was to deduct the emergency loan from the bridge loan as part of the original lending conditions.
The Ministry of Finance is expected to transfer the first tranche of the bridge loan to PJIA’s account this week. Geerlings said PJIA’s bondholders are also being kept informed. The $5 million vital liquidity support PJIA received in the form of a zero-interest-bearing loan from the Government of St. Maarten was to ensure that the cash-strapped organisation was able to meet its obligations at the end of January that included paying 270 workers.
After a financial recovery review of PJIA, the company showed that it is in a financially precarious situation post-Hurricane Irma and, after negotiations with St. Maarten and the Dutch Government, an agreement was reached for the Dutch Government to repay the $5 million emergency loan. This money will be repaid to St. Maarten when it receives the next tranche of its own liquidity support pledged by the Netherlands to aid in servicing the island’s financial/operational obligations, according to Geerlings.
The $15 million bridge loan will be given to the airport in tranches of $5 million. One condition of this support is that PJIA produces a monthly report for the government on its use of the funds received, which are not intended for the reconstruction of PJIA’s terminal building, according to Geerlings.
“The idea is for the money to be used for paying salaries and servicing other operational expenses, but it is not to be used for reconstruction,” he said on Tuesday.
The money will give PJIA some breathing room while the terms sheet for the $100 million financing for reconstruction of the terminal building is being finalised. That financing is being made available from the Dutch Government-financed Trust Fund administered by the World Bank and by the European Investment Bank (EIB) for $50 million each.
The money from the Trust Fund will be given to the government of St. Maarten as a grant while the EIB funds will be in the form of a loan which the government of St. Maarten will then lend to PJIA.
Source: The Daily Herald https://www.thedailyherald.sx/islands/85765-geerlings-signs-pjia-bridge-loan-agreement