PHILIPSBURG — The Central Bank of Curacao and St. Maarten (CBCS) wants to finalize the restructuring of troubled insurance company ENNIA by December 1 of this year but it is unable to do so without approval of the so-called Outline Agreement by the Parliament of St. Maarten.
Without St. Maarten’s approval, the CBCS has no other choice but to file for the bankruptcy of ENNIA, President Richard Doornbosch and Executive Director Jose Jardim write in a letter to outgoing Finance Minister Marinka Gumbs.
Minister Gumbs criticized the proposed solution during a meeting of parliament that took place on June 29. She promised to come back to parliament with answers to questions posed within two weeks but so far this has not happened. The scheduled meeting for July 19 did not take place. Curacao’s parliament approved the agreement already on February 27.
Under the agreement, St. Maarten would pay around $1.1 million per year for a period of thirty years. This money would be withheld from the dividend the country receives from the central bank (currently a bit above $2.2 million) and would leave the treasury with just $535,653 in dividends each year. The Central Bank intends to save ENNIA from bankruptcy with an annual payment of around $8.4 million.
If the parliament agrees with the costly rescue operation, the Netherlands will lower the interest on outstanding Covid-loans of 316 million guilders from 3.4 to 2.9 percent.
In June Minister Gumbs described the proposed solution and linking the interest-percentage on the Covid-loans as modern slavery and as being “not the best solution for St. Maarten.”
The CBCS-top is urging the parliament to take a decision soon. Without this approval, ENNIA will be unable to make pension-payments by the beginning of next year.
“A pivotal moment in time, after which the implementation of the Outline Agreement practically becomes unfeasible, is fast approaching,” Doornbosch and Jardim write in their letter to Minister Gumbs.
The CBCS states that, without a solution, ENNIA will be unable to continue payouts to policy holders in early 2025. The CBCS will be obliged to file for ENNIA’s bankruptcy if no timely approval is obtained by the parliament of Sint Maarten and no alternative solution is reached.”
The CBCS observes that the August 19 elections in St. Maarten further complicate the situation and adds that a continuation of the June 29 parliamentary meeting is vital.
The letter reveals that minister Gumbs met with representatives of the CBCS on July 18 and that during that meeting answers to questions asked by parliamentarians were extensively prepared. The bank now asks for another meeting to substantiate once more why at present the Outline Agreement is the only feasible way to save ENNIA from bankruptcy.
###
ADVERTISEMENT
