Bad press forces Santander to withdraw SSB loan request Print E-mail
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Friday, 19 February 2016 00:00

At a press conference called by the Santander Group, Andres Ayau, Chief Financial Officer for the company announced on Friday February 12, that it would not take a 12 million dollar loan from the Social Security Board. At the announcement Ayau stated: "It's sad enough to say that this issue was politicized and it's been a negative connotation and due to this negative media coverage we decided to actually use another lender, an international lender to cover that participation." The announcement ended a week's worth of speculation and badmouthing by a few public persons who preferred that SSB not make the investment which ultimately would have earned the board an 8 percent return on investment in the first two years of the loan and 7 percent thereafter on the 10 year loan.

Santander had approached the Social Security Board with the proposal in October of last year after a bank which had originally committed to the loan withdrew the commitment leaving Santander to look for another investor which they have since found. Ayau stated that, "We thought it would be a good thing to invite Social Security Board to participate... This loan offers a return of 7% which is more than twice what you are currently getting and exceeds inflation cost which are not being covered by the current returns you are getting." That is now a lost opportunity but Santander is not yet giving up on the possibility that the SSB invest in its operations. Ayau says that "We would like to leave the door open for Social Security Board and we are announcing here that we are doing and additional investment around this project for expansion of the factory and the sugarcane fields of 15 million US dollars and we continue our invitation to Social Security to participate in that's transaction. We hope that these issues can go beyond the politics around it and that we can see that these are safe and sound transactions. We will apply again for those funds. Like I say, we remain committed to offering these returns. I think it's a sound investment. I think it's something that the public and Social Security should take a very close look at."

Currently the Santander factory is very near to being operational with grinding of cane projected to come in the next two weeks. Ayau says that for the time being the factory will be run as a test to ensure that it works properly. A full harvest is expected next year with 800,000 tons of cane being crushed to produce 80,000 tons of sugar cane and about 50,000 tons of molasses. It is also expected that the opeartions will also supply electricity to the national grid.

For now Santander says that it will be exporting sugar to the European market and they say they have firm offers for all that will be produced this year and a portion of next year's production.