PHILIPSBURG–JPF Corporate Financing proposed US $240 million to finance Princess Juliana International Airport’s (PJIA) reconstruction in a presentation last week to the management and supervisory boards of PJIA, Vidanova Pension Fund and Bank, and Tourism, Economic Affairs, Transport and Telecommunications (TEATT) Minister Stuart Johnson, according to documents in the possession of The Daily Herald.
The offer included financing to rebuild the main terminal, buy out current bondholders, repay government loans, and for liquidity support during the reconstruction period. It also outlines that a deal could be closed by mid-November.
According to the documents, PJIA is currently in default of its $102 million bond. Additionally, the bondholders have claimed all insurance proceeds paid to PJIA, as well as all airport departure fees, as security in the event of default. Guggenheim Investments, insurance company CIGNA, and CIBC FirstCaribbean International Bank hold about 90 per cent of the outstanding bonds.
The total financial need of PJIA is estimated at $335 million, according to the documents. This includes approximately $93 million still owed to the bondholders, $107 million to rebuild the current airport terminal, $7.5 million to build a new facility for private jets, and $20 million each for liquidity support and to repay the St. Maarten government for its loan to PJIA earlier this year.
A remaining $80 million is allocated for an expansion of the airport terminal, which includes improvement to the apron, parking facilities, and to establish United States (US) pre-clearance.
According to the documents, Vidanova’s $240 million loan would be disbursed in three parts. The first would cover $113 million at an interest rate between 4.5 and five per cent, with a repayment period of 25 years. This would repay the remaining amount owed to the bondholders and the government’s $20 million loan.
The second part would cover $107 million to rebuild the current airport terminal at an interest rate between 4.5 and five per cent, with a repayment period of 25 years.
The last part disburses the remaining $20 million for liquidity support at an interest rate between 4.5 and five per cent, with a repayment period of five years.
The proposal does not finance the estimated $80 million expansion of PJIA’s terminal building, which includes US pre-clearance. However, there is the implication that buying out the existing bondholders would free the insurance proceeds paid to PJIA. According to the documents, approximately $95 million in insurance proceeds is being claimed by the bondholders.
On August 15, an arbitration panel consisting of arbitrators appointed by PJIA’s operating company PJIAE, NAGICO Insurances and the Court of First Instance, ruled in favour of PJIAE in the settlement of a $71 million insurance claim against NAGICO, the company’s principal insurer. It was unclear up to press time what the remaining $24 million in insurance claims refers to.
Vidanova started in 1968 as a pension fund for all the electricity companies in the former Netherlands Antilles. Utilities company GEBE is one of the fund’s founding members. St. Maarten telecommunications company TelEm and White and Yellow Cross Care Foundation are current sponsors of the fund. In 2019, Vidanova pension fund became the sole owner of Vidanova Bank.
JPF Corporate Financing has been the arranger in the $150 million financing of Port St. Maarten, and the NAf. 135 million debt financing of St. Maarten Medical Center (SMMC). Notably, it was co-arranger of the NAf. 200 million to fund Curaçao’s “Hospital Nobo Otrabanda” HNO, which has yet to be completed due to insufficient funding.
LINK ORIGINAL: The Daily Herald