PHILIPSBURG–Interim Finance Minister Ardwell Irion provided clarity on the sale of St. Maarten’s 12.5 per cent share in United Telecommunications Services (UTS) during the first question hour for the 2019-2020 parliamentary year held on Monday.
United Democrats (UD) Member of Parliament (MP) Sarah Wescot-Williams had submitted the questions for the question hour. Before the meeting began, there was a lengthy back-and-forth amongst MPs Wescot-Williams, Rodolphe Samuel and First Vice Chair of Parliament Rolando Brison, who chaired the meeting, over the rules of order, speaking time and adhering to the rules.
It later became clear, after it was pointed out by St. Maarten Christian Party (SMCP) MP Wycliffe Smith, that there was a discrepancy between the Dutch and English translations of an article in the rules of order, which Brison said could have contributed to the earlier confusion and has to be addressed.
In answering the questions received beforehand, Irion told MPs that a first tranche of the settlement from the sale of St. Maarten’s shares of UTS had been paid on September 10, 2019, which amounts to NAf. 9,206,975.34. This amount was received directly after the signing of the deed of sale and transfer of the shares.
In accordance with the contract that was signed by the previous Minister of Finance and the previous Minister of Justice, another tranche will be received as soon as the National Ordinance authorising the selling of the shares of UTS is formally amended.
In addition, the contract stipulates that there is a “holdback amount”. The pay-out of this holdback amount depends on the agreement between the government of Curaçao and the buyers on the final purchase price calculation for all UTS shares, Irion explained. By letter of January 9, 2020, UTS informed government on the pay-out of the holdback amount to St. Maarten based on the final purchase price calculation for all UTS shares.
Within 10 days after the draft National Ordinance is formally amended, the second tranche and the holdback amount will be paid, for the entire amount to be settled, he made clear. The amended Ordinance was approved by the Council of Ministers on January 7, and will be sent to Parliament for handling.
In response to Wescot-Williams’ question about the “technicalities” encountered with the draft contract, Irion explained that the sales contract had been signed on September 9, 2019, after the establishment of the National Ordinance of September 3, 2019. This is not a draft contract but a final contract signed by the previous Ministers of Finance and Justice. The National Ordinance states that the minimum price for the sale of the shares cannot be less than NAf. 20 million.
However, the contract does not make any mention of a minimum price. Instead, the contract mentions that there is a “Headline Purchase Price,” which has to be adjusted to a “final St. Maarten Purchase Price,” which was not known at the moment of signing.
“So, although there is a signed contract as of September 9, 2019, with regard to the technicalities encountered with the draft contract, the ‘Headline Purchase Price’ was called the ‘Closing Date Payment’ and the amounts were only reflected in US dollars. The technicalities were in the difference between the wording of the contract and the National Ordinance.
“The question was about what was exactly meant with the ‘minimum price’ in the National Ordinance. Should this be a minimum price before or after purchase costs, etc.? Additionally, the final purchase price was not known at the moment of signing, because the final purchase price would be calculated at a later moment.”
According to the contract, this uncertainty has to be clarified by amending the wording in the National Ordinance.
“With the Council of Ministers-approved amendment, the Ordinance aligned with the contract and it is clear that the definition of the ‘minimum price’ is the same as the ‘Headline Purchase Price’ as stated in the contract (which price will be adjusted after the transfer date for debts, costs and changes in the working capital of UTS).
“As mentioned, once the National Ordinance is formally amended, the remaining amount will be paid, and I would like to take this opportunity to request Parliament to handle this amendment with the necessary urgency.”
Irion said that as far as he was aware there had been no layoffs in UTS.
It was disclosed during the meeting that police officers had been paid some of their back pay via the cash flow of government. He said a decision had been made to pay the workers via the treasury and not hold it up any longer. The treasury will be reimbursed when the next tranche of payment is received from the UTS sale.
Source: The Daily Herald https://www.thedailyherald.sx/islands/irion-gives-clarity-on-uts-sale-during-question-hour