The Court of Appeal on Friday evening denied the request of Fortis Energy International (Belize) Inc., subsidiary of Fortis Inc. of Canada, for an injunction to stop the Belize Electricity Limited (BEL) from issuing $10 million worth of preference shares to the Belize Social Security Board (SSB), which it is offering at an interest rate of 5% yearly.
The application of Fortis was vigorously opposed by attorney for the Government of Belize, Denys Barrow, SC, who challenged Fortis’ initial application, which sought to stop BEL from not just issuing the new preference shares to BEL, but which also sought to block any move by BEL to raise new financing, including $25 million it hopes to raise in series 5 debentures by the end of the year.
Fortis has claimed that new debt would diminish the value of the company’s shares.
Government has maintained that there is no guarantee that even if Fortis is successful in challenging the July 2011 nationalization of BEL, that the court would order a return of the shares.
That constitutional challenge has been heard by the Court of Appeal, but a decision is still pending and may not come until next March, Barrow told us.
If Fortis wants to challenge Friday’s decision by the Court of Appeal, it will have to apply to the Caribbean Court of Justice (CCJ) for leave to appeal.
BEL is also offering $5 million worth of debentures to the SSB.
Chairman of the SSB, Doug Singh, told Amandala on Monday that the SSB had never stopped moving on the transactions, and it continued with the legal requirement of publishing its notices for both the $10 million worth of preference shares and $5 million in debentures, because it was never restrained from proceeding.
Singh said that there would be two agreements between BEL and the SSB: one for the purchase of the preference shares and the other for the purchase of the debentures, and that it intends to ink both deals at the same time.
BEL hopes to issue a prospectus for the series 5 debentures by the end of the month and close the offering in December 2012.
The SSB would, in the interim, provide a secured loan for $10 million to BEL, which would be secured by company assets such as the Magazine Road property and the Northern Highway headquarters. That secured loan, Singh said, may come through as early as next week.