STATE’S UBS DEAL IN RED

Former Treasurer, Member for Kandep and Leader of THE party Hon. Don Pomb Polye today said he is not surprised the State has experienced its first problem with the UBS loan when it failed to pay the interest payment for the UBS loan as part of its obligation in managing the A$1.239 billion (about K3 billion) loan.
Mr Polye said: “I have warned the Prime Minister against the ramifications when the UBS loan was approved in a speedy manner without considering the risks involved in the bridge and collar loans. There are related problems with the loan if it is in default. The sovereign risk would have serious impact on the value of PNG kina and it will affect the economy.”

Mr Polye has commended the Ombudsman Commission for doing its independent job and the priority for the Ombudsman Commission is to complete the investigation on the A$1.239 billion loan which comprises of two components: a bridge loan of A$335 million which attracts an interest rate of 5.50% per annum and a collar loan of A$904 million which attracts an interest rate of 4.95% per annum.
Mr Polye has requested the Prime Minister Peter O’Neill to publicly inform the people of PNG that the State’s shareholding of 10.01% in Oil Search Limited has been automatically sold to UBS as the State has defaulted in the loan repayment.

He said the people have the right to know about the default situation which occurred on 16 May 2014 with the consequences suffered as he has warned against the strict compliance on the collar loan conditions.
Mr Polye said the government failed in its attempts in interfering into the role of the Ombudsman Commission as its priority was to complete the investigation into the UBS loan. The Ombudsman Commission would not compromise its role with the government in attending to the urgency surrounding the payment of the interest and the potential consequences after the default in the loan repayment.

“Mr O’Neill and his government are confronted with a worst case scenario as he failed to take my advice that the UBS loan was bad for the country,” said Mr Polye. He called on Mr O’Neill to resign from PM’s post for poorly managing the economy of this country.

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