S.N.P.F. to hotel owners: pay up or shut down
The head of Samoa National Provident Fund (S.N.P.F.) Pauli Prince Suhren, has warned hoteliers with outstanding loans to pay up or face the wrath of “full foreclosure.”
Pauli's statement comes after the Samoa Observer revealed on Wednesday that Cabinet had made an extraordinary intervention to prevent the auction of the Pasefika Inn from being seized and auctioned off after it fell behind on a loan to the S.N.P.F.
Though at a less advanced stage of default, the S.N.P.F. is understood to have past due loans with a number of other tourism-related businesses on its books but Pauli did not disclose specifics during an interview with the Samoa Observer.
Pauli confirmed that Cabinet had indeed ordered that the sale of the Inn be halted by Government decree and the hotel's owner be given time to pay back his outstanding loans.
“Our task now is to work with Pasefika Inn urgently to find a way to remedy the delinquent status of their account with S.N.P.F.," Pauli said.
“That is the intention of Cabinet.
“The so called “Grace Period” that Cabinet has granted is not a period of rest for these hotels – it is a period for them to seriously reflect on their position, get their houses in order and arrive at amicable resolutions for their loan accounts or otherwise face full foreclosure.”
Pauli said the hotels should focus on getting "their house in order.”
He concluded: “I sincerely hope and pray for their sake, that these businesses do not take the Cabinet’s generosity for granted.”
According to a copy of the Cabinet minutes obtained by the Samoa Observer hoteliers with unpaid loans will be "given a limited time of up to December, 2020 to pay their unpaid loans”.
Pasefika Inn owner Pulepule Steve Young has said a lack of tourists led to the predicament they are facing.
“We took our case to the government because we needed help. We are struggling,” said Pulepule.
He told the Samoa Observer, the “Cabinet stepped in [and] stopped the auction with a F.K. [Cabinet directive].”
Cabinet had earlier also halted the foreclosure of eight other hotels which had similarly fallen behind on their repayment obligations with the Development Bank of Samoa (D.B.S.).
A September report by the Asian Development Bank (A.D.B.) concluded that the D.B.S. were underpricing loans, had an excessively high proportion of past due loans and was on a path to insolvency.
Overdue loans on D.B.S.'s books rose to up to 50 per cent of its outstanding money in 2016.
Large corporations, about two-thirds of which were in the tourism sector, represented the majority of those owing money to the bank.