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CFC Loan Restructuring Proposal

PALIKIR, Pohnpei (FSM Information Service): September 16, 1997 - President Jacob Nena, on September 5, 1997, responded to a letter of May 27, 1997, from Receiver for the Caroline Fisheries Corporation (CFC), Nicholson Solomon, proposing to restructure CFC in the form of recapitalization of the loan into equity.

Nena says that the need to diligently handle the matter in view of the economic realities of FSM delays his response. The FSM is undergoing restructuring in view of the doubtful economic prospects for the government beyond 2001.

The newly FSM adopted Fisheries Policy, however, is emphasizing privatization of government-owned fisheries enterprises which is consistent with the government's need to get back the money it loaned to CFC within a reasonable time-frame.

Nena says it is imperative for the National Government to be satisfied with the followings: an accounting audit that shows the current financial standing of CFC; the CFC restructuring plan includes its business plan; a feasibility study that ascertains that privatization of CFC is feasible, and other things that may come up.

In closing, the President urged for an audit to be conducted by a notable, independent firm endorsed by the National Government. And that FSM looks forward to further collaboration with CFC until it is satisfactorily resolved.