A letter form Governor Lolo Moliga to the Chairman of the Board of the American Samoa Telecommunication Authority, Faiivae Alex Godinet, sheds some light on how the administration hopes to finance the Hawaiki Cable, and also why it’s important to put qualified management in ASTCA at this time.
The governor said in his November 13 letter, that the growing insolvency of ASTCA coupled with its inability to complete its revenue generating products package compelled the implementation of emergency measures to reserve this “fiscally debilitating downhill trend.”
He explains that since the Senate turned down the bill to allow financing of the $18 million owed to Hawaiki, the option to go out to the bond market to secure needed capital financing was invoked.
According to the governor in order to obtain a good bond rating to reduce the interest payment on our bonds, the American Samoa Economic Development Authority presented to Moody’s Bond rating company.
This was the meeting ASEDA held in Honolulu last week.
The governor writes that “since 67.3% or $35,000 of the total bond issue of $52 million was to defray ASTCA’s existing and accruing liabilities, Moody was to be reassured that our investment in Hawaiki was a sound economic development decision.
“Accordingly, the ASEDA team including Mr. Adolfo Montenegro and Mr. Lewis Wolman presented ASTCA’s financial recovery plan.”
“This plan,” said Lolo, “would empower ASTCA, after three years to meet the cost of the bond payments from its own revenues, freeing an estimated $3.2 million of the ASG pledged revenues for bond payments on ASTCA’s indebtedness”.
The governor pointed out that the Financial Recovery Plan called for the immediate settlement of the leadership and management issues currently existing within ASTCA.
“Moreover it was imperative that assurance be given to show that this issue would be resolved promptly.
“Based on these pressures, I was compelled to secure a commitment from Mr. Lewis Wolman to immediately spearhead the implementation of the ASTCA Financial Recovery Plan for one year,” said Lolo.
The governor concludes by telling the ASTCA Board chairman: “The success of ASTCA is our collective priority because of its impact on the territory’s efforts to diversify its economy given the uncertainties threatening the tuna industry let alone the loss of our substantial investments.
“I do appreciate your support and that of the board as we struggle to acquire funds to fully finance its operation so it can achieve our joined vision. ”
Yesterday was the deadline for applications for the ASTCA CEO job and there were four applicants including Wolman.
The ASTCA Board, appointed by the governor and confirmed by the Fono, intends to go ahead with interviews despite the governor’s decision to appoint Wolman as the new CEO of the government telecommunications entity.
