Ray George asks why OC has not paid its class C shareholders
Instead he claims; he along with other Government officials is being blamed for the non-payments.
George said he is in possession of the relevant documents, based on Consolidated Water Company Limited, and its affiliate Ocean Conversion (BVI) Limited, Annual Filing Form 10K, with the Securities and Exchange Commission in Washington, D.C., (SEC).
The Coordinator explained that in OC, there are three classes of shareholders – ‘Class A’ comprise of 555,000 shares owned solely by Consolidated Water Company Limited (Cayman Islands); ‘Class B’ 555,000 owned by a few select Virgin Islanders, including members of investment club and ‘Class C’ includes 165,000 shares also owned by other Virgin Islanders.
According to him, between 2005 and 2007, the gross income for OC was $24,719, 101, and the company had a total net profit of $10,104,488.
“During that time, they also paid $4,335,171 in dividends and paid a total of $435,253 in interest expense to Consolidated Water for a loan. OC also collected US1,145,221, in interest income….during the same period also, the company enjoyed $1,377,000 in profit sharing, along with $630,000 principle loan payment to Consolidated Water and $1,447,363 in management fees to Consolidated Water. The OC also paid out $447, 809 in directors’ fees,” George stated.
Furthermore, he disclosed that OC had at the end of December 31, 2007, a profit sharing obligation (not paid) of $3,250,256 and Loans Payable to Consolidated Water in the amount of $2,875,000.
“…that the total amount that was actually paid plus obligations between Consolidated Water and OC between three years was $26, 415, 408, while the Class C shareholders received nothing,” he divulged.
George disclose further that “on May 25, 2005, several months before the tender was issued for sale of Water by the NDP Government, Ocean Conversion entered into a loan agreement with Consolidated Water Company Limited, which owns 50 percent of the voting shares of Ocean Conversion (BVI) Limited, for an amount of US$3M for the design and construction of Ocean Conversion’s Bar Bay Plant.
“The Loan payment was originally due and payable on June 1, 2007, with an interest rate of London Interbank Offered Rate (LIBOR) plus 3.5 percent. The loan which was amended on August 24, 2007, only four days after the NDP lost 2007, General Elections, is secured by a debenture or charge on all of the assets of Ocean Conversion (BVI) Limited thus severely exposing the Company and placing the “local” company in foreign hands,” he stated.
George continued: “Perhaps even more troubling and disturbing is the two main conditions for not defaulting on the loans and placing the company totally in foreign hands. A direct quote from Consolidated Water Company’s SEC Filings Annual Form 10-K, concerning its Affiliate, Ocean Conversion (BVI) Limited reads as follows: “The Company’s failure to obtain new agreements with the BVI government for its Baugher’s Bay and Bar Bay plants, constituted an event of default under the loan agreement as of December 31, 2009.”
In other words, the project coordinator pointed out Ocean Conversion did the unthinkable and signed a loan agreement with Consolidated Water Company which would put them in default of the loan and possible loss and liquidation of all of their assets if they did not sign both Bar Bay and Baugher’s Bay Plant.
“The NDP Government left power on August 20, 2007, with OC not having any agreements signed thus leaving them and their investors, especially the Class C investors, severely exposed, desperate, facing closure and at the mercy and the knees of Consolidated Water Company Limited. Consolidated Water Company responded to Ocean Conversation’s desperation by extending waivers or in this case, stays of execution to Ocean Conversion by increasing the Loan rate to OC on August 2009 to LIBOR plus 5.5 percent and further increase of 7.5 percent only six months later on January 2010.”
“ These and other acts driven by desperation led OC to turn off the water on residents of the BVI on March 29, 2010, as Consolidated Water continued to turn up the pressure and effort to protect their interest in OC and the stop the severe decreases in their stock price, which affected other investments in the Bahamas and Cayman Islands, in particular. The ruling Virgin Islands Party Government saved or bailed out Ocean Conversion when they signed the Water Purchase Agreement with Ocean Conversion on March 4, 2010, for the OC’S Bar Bay Plant thus ensuring the survival of OC and its investors,” George said.
According to him, another significant event that occurred in the year 2005, is also taken directly from the Consolidated Water Company Limited’s December 31, 2010, Annual Form 10-K Filings with the SEC in Washington D.C.
The filing states, “In 2005 the company entered into a twenty-five lease agreement with Bar Bay Estate Holdings Limited (“Bar Bay Holdings”), a private company incorporated in the Territory of the British Virgin Islands, pursuant to which the Company agreed to lease from Bar Bay Holdings approximately 50,000 square feet of land on Tortola, British Virgin Islands on which a seawater desalination plant and wells are constructed. Under the terms of the lease agreement, a lease premium payment of $750,000 was made on June 10, 2005, annual lease and easement payments of $17,662 ($15,020 through May 2010) are due annually and royalty payment s of 2.87% of annual sales, as defined in the lease agreement, are payable quarterly.”
Class C shareholders include teachers union and other VI residents and citizens.
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