No funds will be lost in Vt800 million loan guarantee: VNPF GM
July 6, 2020 4:58 am | Posted in Business News | Share now TwitterFacebook
By Kizzy Kalsakau & Anita Roberts
The current board and management of the Vanuatu National Provident Fund (VNPF) will not allow the fund to lose any money for being used as a guarantor for the Vt800 million loan Interchange Ltd (ICT) has with ANZ Bank.
The assurance was made by VNPF General Manager (GM), Parmod Achary.
The decision to use VNPF as a guarantor in this loan was approved by the VNPF Board in 2014. Being a guarantor means that if ICL fails to meet the loan, VNPF will cover it.
According to the GM Achary, the loan guarantee expires next month.
“If ICL does not provide any alternative by then, the bank will use our term deposit to clear its debt, which means that member’s funds will be lost.
“If this happen, it will definitely be a dent in VNPF’s operation since it’s a substantial amount. We are not ready to face such a loss in this small economy. We cannot lose any money in this one,” he said.
VNPF had no choice but to get the security done for what it has allowed as guarantee for ICL with ANZ, said GM Achary.
“Currently, there is no security for us since the loan agreement was between ICL and ANZ. VNPF is just the guarantor. Members should understand that part of restructuring the loan arrangement is to protect member’s funds.
“Under the new arrangement, we will be giving a direct loan at an amount of USD $7.9m to ICL which will clear ANZ. A loan agreement which will be developed will outline the terms and conditions of the loan.
“It will ensure VNPF have a direct access to funds from ICL and is paid monthly. Also, we will be taking more interest in the management of ICL and will have mortgage on shares of shareholders, except VNPF.”
GM Achary assured that he is dealing with the company directly to ensure that it starts paying dividend.
“In my first statement as the GM, I have assured members that their funds will always be protected under my leadership. This is what I am trying to do now, to recover the funds which were being given out as guarantee.”
VNPF is the largest shareholder in ICL.