The $33.5 million debt that Prime Minister Said Musa took on in the name of the Government of Belize for Universal Health Services (UHS) fell due at the start of this week, but the debt has not been settled.
Several sources have indicated to our newspaper that negotiations are still ongoing for the takeover of UHS by private sector entities.
Under intense public pressure, Prime Minister Musa had to back off in May from his attempt to get the legislature to approve a motion to pay the UHS debt with public funds.
In a statement issued on May 24, he announced that, “Several different business groups have approached us, including local and international business persons, and those affiliated with American universities. They are interested in taking over UHS.”
Four months after that statement, however, no final deal has been announced.
A $33.5 million loan note that the Prime Minister signed on March 23—without the National Assembly’s approval required under the Finance and Audit (Reform) Act—had a six-month term and was due four days ago. The Government had defaulted on monthly payments, and as a consequence the Belize Bank commenced arbitration proceedings to pressure the Government into settling the debt.
Government has ignored the arbitration, saying that it knows the debt has to be paid and private sector investors will be brought in to take over the investment. However, a critical question arises: How will the Government unilaterally sell shares that are under the control of the Belize Bank?
We note that in addition to the $33.5 million UHS debt, Musa went on to “sign, seal and deliver” a further loan agreement for $12 million at the end of March—also without the legally required National Assembly approval—under which virtually all the shares of the UHS group of companies, as well as their freehold and leasehold properties, were pledged as security.
The Belize Bank took as security for the $12 million loan 98.28% of UHS Co. Ltd., 95% of Integral Health Care Limited, 99.7% of the Pathology Lab, and 100% of Universal Specialist Hospital Co. Ltd. The loan agreement is for 15 years at a rate of 13% interest per annum.
Our legal sources indicate that in order to release those UHS shares for sale, the additional $12 million debt will have to be settled or renegotiated, or new collateral will have to be pledged to replace the shares.
One formula being considered at the moment is for one set of investors to take on 51% of the UHS group, while another set takes on the remaining minority shares.