The company, Santander formerly known as Green Tropics may be benefitting from a twelve million dollar loan from the Social Security Board for further development of the mill located on the George Price Highway in the Cayo District. The loan was approved last week and is in the publication stage where members of the general public can submit their objections or views on the decision. Douglas Singh is the Chairman of the Social Security Board and he explained to Love News the rationale behind the 12-million dollar loan.
“Social Security was asked to participate in a syndicated loan put together by Santander. Santander is investing or has invested 142 million US dollars in the establishment of a sugar factory and a number of acres of land in sugar in the west of Belize. Their investment comprised of about close to $50 million USD of their equity investments and $96 million US dollars in loans. That $96 million USD in loans came from a syndicated loan package that they put on the market. Investors in that syndicated package included several Belize banks including Belize Bank, Atlantic Bank and Heritage Bank. In addition to that there were a number of external banks, regional banks and I think a bank out of Washington DC. One of the lenders could no longer participate in it and they were in it to the tune of $6 million USD and Santander came to Social Security and asked Social Security if it would be interested in investing in this syndicated loan. Social Security reviewed it, it went to the investment committee, I think they presented this to us just over two months ago and the investment committee reviewed it, looked into it further with our attorney who verified that all the securities are in place and that the loan can be secured as they presented it. It was then recommended to the Board of Directors and the Board of Directors has approved it. This loan as I said is just a little bit over 6% of the total amount that is being loaned to Santander from various institutions many in Belize and some internationally.”
While it is not unusual for the Social Security Board to approve loans of this magnitude, some concerns have reached our news desk considering that it is a Guatemalan company, whose management initially was reluctant in hiring the locals and opting to obtain work permits for Guatemalans to come into Belize and work. We asked Chairman Singh to comment.
“There were allegations that they had difficulty hiring Belizeans but as I said before that is a two sided argument. When that was brought to the media about a year or so ago when they were putting the factory together they expressed their difficulty in getting the level of qualified people like high tech engineers who are welders and electricians to put the factory together. They seemed to have satisfied the Labor Department and the Immigration Department to be able to secure the relevant permits to hire the people that they needed. I must say that Social Security received a significant amount of monies on a monthly basis for Social Security for employees that they hire which demonstrates that they do hire a number of local people in addition to the other people being hired. So I’m not so sure how well that argument is placed or if that is the circumstance today.”
Chairman Singh went on to tell Love News that in this particular case, SSB stands to benefit. He also explained the process of the loan which was sought about two months ago.
“The process for a loan at SSB must go to the investment committee, once that goes to the investment committee they will recommend it to the board then the board is then in a position to look at it. Once the board has approved it, it has to be publicized in at least two newspapers, I believe the Gazette and at least one or two newspapers for two consecutive weeks and it is after that time that the disbursement can be made and of course after all security documents have been put in place as well. This one is actually a good one for Social Security in terms of returns. As you may be aware interest rates at all the banks are significantly lower than they were many years ago when social security enjoyed up to 9% in deposits. Today we are getting 2.5% perhaps 3% if we are lucky on deposits. This loan offers an 8% return in the first two years and a 7% return thereafter which is significantly more and will help to strengthen the fund that helps to benefit Belizeans. In addition to which I think it’s a worthy investment because it helps to develop an industry in Belize that helps to create employment for Belizeans and it helps with foreign exchange for the country. This is not like we are lending overseas we are actually lending for domestic investment so I think overall the loan has many merits in it.”
The Social Security Board does have an Investment Services Unit with one of its mission being to sustain economically targeted investments or socially desirable projects in the area of agriculture, education, financial, housing, real estate, tourism, and utilities. The publication of this decision on the 12-million dollar loan to Santander will go on for two weeks before it is completely finalized.