POLYNESIAN AIRLINES' OLD DEBT A STAGGERING $T 125 MILLION

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APIA, Samoa (June 22, 2000 - Samoa Observer/PINA Nius Online)---Polynesian Airlines' old multi-million Tala debt is not diminishing. It will remain to haunt the government instead. Over the last four years or so, the public has been made to pour $T 10 million annually into the debt.

(NOTE: Tala/$T 3.3090 = $US 1.00)

But having a mind of its own, the debt has continued to grow. In 1998, the debt was $121,667,429. Last year, it jumped to $125,109,142. These figures are provided in Polynesian Airlines (Holdings) Ltd.'s audited financial statements for the year ended 30 June 1999. This means if the trend continues, which is very much likely, the debt could grow close to $130 million by the end of this year. According to the financial statements, the company incurred a loss of $3,441,713 last year compared to $5,043,976 in the 1998 financial year.

And announcing the accumulated loses of $125,109,142 for 1999 and $121,667,429, the company's board of directors was kind enough not to give themselves dividends. "The directors recommend that no dividend be paid for the year," the statement, signed by Prime Minister Tuilaepa Sailele Malielegaoi, as one of the directors, says.

Polynesian Airlines (Holdings) is the company set up by the government in mid-1994 to prevent debt-ridden Polynesian Airlines from falling into the sea. The plan was to transfer all the debts to the "holding company" for the public to pay, and allow the airline to keep flying under another company called Polynesian Limited.

A third company, called Polynesian Airlines (Investments) Ltd. was also formed. This one was considered the "Parent" company which job was "operating leasing" requirements. The "ultimate parent is the Government of Samoa," says the financial statement.

Polynesian Ltd., on the other hand, otherwise also known as the "Sister" company, was to "receive cash funding on behalf/operating lease/interest earnings." Polynesian Ltd., which also makes "all payments and receipts," is expecting the arrival of a new aircraft later this year. "On 1 July 1999, the parent company entered a lease agreement to lease a B737-800 aircraft," says the statement. "Delivery of the aircraft is scheduled for November 2000.

"It is management's intention that Polynesian Airlines (Holdings) Ltd. Will sublease the aircraft, and then sublease it towards Polynesian Ltd. "The expected monthly lease expense and revenue is $US 301,500 ($T 904,500) plus maintenance costs."

And what will be done with the present B737 aircraft? The financial statement doesn't say. All it says is that aircraft's operating lease commitment at 30 June 1999 was $13,399,616 compared to $13,113,236 at 30 June 1998.

Pacific Islands News Association (PINA) Website: http://www.pinanius.org 

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