Belize’s premier commercial port in Belize City, owned and operated by Luke Espat’s Port of Belize Limited (PBL), came under the control of Michael Ashcroft’s Private Investment Limited (PIL) early this morning, after weeks of reports that bankers were about to move in and take over the operations due to problems with financing a $64 million loan tied to the adjacent Southside cruise port and free zone project, which has been on an extended standstill.
Today, said Espat, about 20 police officers, including many of senior rank, descended on the Port to execute what he described as “a hostile takeover,” “without due process,” aided by the Barrow administration—which, he recalled, has publicly condemned Ashcroft in the hours leading up to the government takeover of Belize Telemedia Limited (BTL).
“They [Ashcroft’s bank] wanted me to book this whole $64 million on Port of Belize in case government decides they will nationalize the Port. And I said no,” said Espat. The accountants advised against that, he added.
“Some political forces are involved both sides of the fence on this deal. We haven’t seen it played out yet. It’s not finished yet,” Espat told us, signaling that he and PIL had been talking about an alternative solution up to yesterday.
Prime Minister Dean Barrow told us this morning that the only reason the police were at the Port was to ensure that there is no breach of the peace, and that the receivership has taken effect without any such breach.
“I told the Prime Minister… you have to set up a camp here, because I am coming back,” said Espat. He said that he also told the supervising police officer at the Port today, “…as soon as you move out of there, I will take back my business.”
As to suggestions from the sidelines of the ruling United Democratic Party (UDP) that the Barrow administration should take back the Port as it did BTL, Prime Minister Barrow told Amandala that Government has considered and rejected the idea of nationalizing the Port.
Barrow said that both the Belize Electricity Limited (BEL) and BTL were going concerns at nationalization, and BEL’s financial situation was not as bad as the former owner, Fortis, made it out to be.
As for the Port, Barrow said, “There have been myriad complaints about the equipment,” and, he said, there is no way that the government could find huge amounts of money that would be required to infuse into the Port. “Government is not in a position to do that.”
Businessman Arturo Vasquez has now assumed control and management of the business and assets of Belize Ports Limited, which owns PBL. He is being assisted by consultant Major Lloyd Jones, former Ports Commissioner and ex-Belize Defence Force soldier.
The receivership was installed yesterday, Wednesday, January 4, 2012, but implemented today, said Vasquez.
He told us that they intend to keep the doors of the Port open: “Definitely, closing down is not an option right now,” he said.
As we reported last week, Vasquez was recently announced as receiver of Luke Espat’s Indeco Equipment Limited, one of several businesses owned by Luke Espat which have been taken over by the Ashcroft group, including the popular recreational spot, Crocland, The Renaissance Towers, and Indeco.
Espat told Amandala that the takeover of the Renaissance was part of the settlement plan with his bankers, and they had agreed on the divestment of what was not earning money, while the bank would get to finish the cruise port, and Port of Belize continues with the commercial port.
That was the agreement, said Espat, who added that “Before now, there was no conflict.”
Espat indicated to Amandala that he arrived at the Port today after the papers were served.
They were served by Ashton Longsworth for Godfrey Smith’s Marine Parade Chambers before 8:00 this morning.
By the end of the day, Vasquez, the man now in charge at the port, had met with Ports Commissioner John Flowers, Christian Workers Union president Antonio Gonzalez, the Port’s senior management, shipping agencies under the Belize Shipping Agents, Port Logistics, Alliance Security, which works with internal security, and marine pilots, head of security operations, warehouse staff and the accountant, said Vasquez, who spoke with us from inside the CEO’s office this evening.
“We’ve assured them that if we won’t have to change anything, we won’t change anything,” Vasquez relayed.
Meanwhile, the former CEO of the Port, Reynaldo Guerrero, has accepted that he should vacate his post and will be paid severance, said Vasquez. His deputy, Francine Waight, continues in her post.
“At the end of the day, it’s really to try to be as cost effective as possible. The point of the receivership is to see what we can improve on, as well as trying to see how we can address the debt of the bank,” Vasquez told us.
This morning, Prime Minister Dean Barrow told Amandala that Government’s concern, really, is to avoid any disruption of port operations.
Vasquez told our newspaper that as early as next week, the receivers would move to hire expert operators and financiers to do a proper evaluation of the Port. Once that is finished, they will make recommendations to PIL on whether to invest, sell, or hand the port back to Luke Espat. He said that they would have to evaluate the Port to determine if they need to improve services and fix or upgrade equipment. He said there is also talk that “labor may be too high.”
Prime Minister Barrow noted that he had previously spoken with Lyndon Guiseppi, who had indicated that the principals, PIL, would move to appoint a receiver. Barrow said that he asked them not to do it before X-mas, and he was informed by Guiseppi from Trinidad and Tobago that it would, in fact, happen today, Thursday, January 5, 2012.
The Prime Minister also told us that he had asked the PIL to meet with the Christian Workers Union, which represents the stevedores, to ensure that there is no loss of employment, and they reiterated that the workers would not be adversely affected at takeover.
Antonio Gonzalez of the CWU, which represents 150 port stevedores and 25 staff members, told our newspaper today that they have received assurances from the receivers that they will continue normal operations and nobody will be affected, and in the event of any changes down the road, they will consult and ask the union to participate.
Espat told Amandala today that he will challenge the takeover in court, because it was executed without a court order.
Vasquez said, though, that PIL really didn’t need one. He said that the receivership appointment refers to two debentures that go as far as permitting, in black and white, the breaking down of doors and cutting of locks: “We can come in and break down the door. It’s in there and I have copies of it.”
Vasquez said that what PBL and its parent company, BPL, had engaged in with the bank is called a “floating debenture” – which means that whatever you own after you enter into the debenture with the bank also falls under the debenture as collateral.
According to Espat, a month ago, Ashcroft’s banking staff, Lyndon Guiseppi, Phillip Johnson and Peter Gaze, came and said they were prepared to buy out the cruise port investment, and the other obligations would be restructured to accommodate the two parties.
“We thought that this thing was settled, until I was surprised one day when I was abroad that they contacted my people and said they have some foreigners that they have to do an inspection of the Port. Government has told them that the Port is falling apart,” said Espat.
He said his response was that PIL needed to give proper notice and indicate the details of what they wanted to inspect.
They said they don’t have to give notice, citing the debenture, Espat told us.
“They are relying on the written agreement. That is what I wanted them to sue me on. So sue me! Sue me!” said Espat.
As for Ashcroft’s involvement in the Port deal, Espat said the bankers have held the Port shares as collateral. The shares, he said “are held by a maze of 10 to 15 different companies” that he and Michael Ashcroft own together. “That’s where ownership would have ended up,” he told us, looking at an organogram he said I would never understand in 100 years.
“We had built Crocland; we had built Renaissance: It was all a part and parcel of a big project,” said Espat, also listing the free zone and building of the cruise terminal at the Port. After putting Crocland under receivership, he said, the movable assets were sold “10 cents on the dollar.” However, the Renaissance is still functioning and paying its way.
Indeco, said Espat, took on the debt to build the free zone at the cruise port, and that is why the Port of Belize originally “had no debt” for the project.
He said that the cruise project needed US$35 million more. The money is available, but PIL “never gave us the time or the opportunity to stabilize the situation.”
As for the possibilities of selling the cruise port project, Espat said: “They will sell it 10 cents on the dollar, involved with somebody else…”
His attorney, Arthur Saldivar, filling in for Senior Counsel Fred Lumor, questioned: “How legal is it for PIL to be [petitioning] upon a financial document that generates interest?” Both Espat and Saldivar contend that PIL cannot operate like a bank in Belize under the country’s laws.
As for the events that unfolded today, said Espat, “It has forces that will be manifested day by day going forward.”
Somebody from the outside looking in might say the problem is the way you do business, that you are unable to keep any of your businesses, we told Espat.
None has survived under Dean Barrow, said Espat.
But, he said: “This won’t end like this! I don’t like litigation, but I will have to go that route. I will have to defend my name.”