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The Gleaner - March 31, 2001

 

Today is D-Day for FINSAC debtors

TODAY IS the deadline for some 18,000 FINSAC debtors to settle their bad debts or face up to so-called "debt sharks," seeking to purchase the debt portfolio at heavily discounted prices.

The Gleaner understands that a number of overseas debt service derivatives or "debt sharks" have descended on the island recently attracted by the possibilities. But, speculation is that only two offers have already been made to the Government, including one from a Grace, Kennedy related company.

In a statement yesterday, the JLP called for a two-month extension of the period for FINSAC debtors to finalise arrangements for repaying their loans.

In the release, the party's spokesman on industry and commerce, Karl Samuda, said that the debtors should also be offered the same option of discharging their debts at deeply discounted prices, in line with offers from potential purchasers.

The situation was triggered by the announcement in the House of Representatives on March 13 by Minister of Finance and Planning, Dr. Omar Davies, that debtors are required to pay up the outstanding amounts by today, or face the wrath of whoever purchases the portfolio.

The Minister says that he will sell the portfolio to the highest bidder. Speculation is that bids have ranged from as below 10 cents to 30 cents in the dollar, but he has refused to confirm any figure although he did suggest a price of 30 cents to the dollar in April, 2000.

Mr. Samuda had confronted the Minister in the House on the issue, stating that the debtors should be given some more time. Dr. Davies said then that while he would not be against extensions, he would not set a new date and that any, if any, extensions granted would have to be based on the advice of FINSAC and with the approval of the Cabinet.

"The Opposition JLP is deeply concerned at the level of distress on individuals and businesses which will arise from these sacrifice sales. Eighteen thousand debtors will see their assets disposed of leaving many of them in desperate economic circumstances," the JLP statement said.

"The Opposition considers that because of the wide-spread dislocations which will result, the deadline for debtors to finalise arrangements with FINSAC should be extended by two months and debtors should be offered the same option of discharging their debts at the deeply discounted prices of 10 cents to 30 cents in the dollar which the (proposed) buyers (of the bad debt portfolio) are reportedly prepared to pay."

The statement said that in this way, the Government would not lose any proceeds of sale and the debtors would benefit.

"Whatever arrangements are finally made should be applicable to all parties who are indebted. The only exception should be in the case of debts relating to the homes in which indebted parties reside or where the debt relates to the only business operated by the debtors. In such cases, longer-term payment arrangements should be allowed."

 

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