Government pays S.T.E.C's default loan
The Government has taken over the repayment of a Samoa Trust Estate Corporation's (S.T.E.C.) loan from the Unit Trust of Samoa to the tune of $4.67 million.
This is revealed in the Government’s Public Account for Financial Year 2018-2019.
The original loan from U.T.O.S. was $3.5 million.
In addition, $1.75 million was given to S.T.E.C. as “additional capital injection for 200 acres to be leased" in the financial year 2018-2019.
“The S.T.E.C. default Loan was taken over by government as of 1st January 2019," the Public Account reads.
"The loan balance of $4,505,043 as of 30th June 2018. However due to monthly interests the total balance of loan when taken over by government was $4,676,601."
Effort to get comments from S.T.E.C's Chief Executive Officer, Patea Loli Setefano, were unsuccessful.
The S.T.E.C. annual report for Financial Year 2016-2017 highlighted additional funds were given to the Corporation as additional capital contribution, to assist with the settlement of its debt with the Unit Trust of Samoa (U.T.O.S) and the overdraft with Samoa Commercial Bank Limited.
Under the section Summary of Significant Accounting Policies there was an “additional government contribution” of $1,700,000 in 2016.
The terms and conditions of the term loan from U.T.O.S. is for five years with an interest of 9.5 per cent per annum.
The first repayment of the principal for year 1 is $300,000, the second year $500,000 tala, the third year $800,000 and the fourth year $900,000 and final year principal repayment is $1 million tala.
The loan is guaranteed by the Government.