MAJURO TUNA PLANT FACES LOAN DEFAULT

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By Giff Johnson

MAJURO, Marshall Islands (Marianas Variety, Oct. 1) – A tuna processing plant in Majuro is in danger of defaulting on a $2 million government-backed bank loan.

The plant has until Oct. 6 to resolve the problems or the bank will recall the loan, said Patrick Chen, president of the Bank of Marshall Islands.

The PMOP tuna loining factory, owned by Philippines, Micronesia and Orient Line president Robert Colson and other foreign investors, has been closed for more than a month because of financial problems. First opened in late 1999 and employing nearly 700 workers, the plant has been the largest private sector employer in Majuro, the capital of Marshall Islands.

But the work force has been laid off since the end of August and company officials said earlier this week they did not know when operations would resume. The plant currently has about 900 tons of frozen fish in its freezers waiting to be processed, according to manager William Fisher.

Through June, the Majuro operation had lost more than $800,000 for the year, Colson said. The plant cleans, fillets, cooks and freezes tuna that is then shipped to American Samoa for canning.

If the loan defaults, the government’s Marshall Islands Marine Resources Authority will be responsible for repaying the loan to the Bank of Marshall Islands, Chen said. Mimra provided a $2-million guarantee to the PMOP tuna plant in the late 1990s, and in July, assisted with a refinancing package that injected an additional $300,000 into plant.

Chen said the company has been making its loan payments, but is in violation of two provisions of its agreement with the bank. These require that it must drop a lawsuit against the local power utility, Marshalls Energy Co., and it must bring all revenue generated from sales of process tuna back to its account at BMI.

The lawsuit against the utility company remains active, and Fisher confirmed in court testimony in early September that only a portion of revenues from the sales of fish to the StarKist tuna cannery in American Samoa are actually returned to Majuro.

October 1, 2004

Marianas Variety: www.mvariety.com

 

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