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Tuesday, June 28, 2022
HomeNewsArchivesWAPA BORROWS $10 MILLION AS SALE DEAL LOOMS

WAPA BORROWS $10 MILLION AS SALE DEAL LOOMS

The Water and Power Authority took out a $10 million loan Friday to fund the installation of underground electric lines to the hospitals and airports on St. Croix and St. Thomas, according to WAPA assistant executive director Glenn Rothgeb.
Both a top official of the company intending to buy majority interest in the utility and the governor's top economic advisor indicated that move the came as a surprise to them.
The action followed WAPA board approval Thursday for the utility to access a $20 million line of credit with Banco Popular and Chase Manhattan Bank and extend it for three years.
Rothgeb said the cable burying and utilization of the line of credit are part of ongoing development plans. The decision should not affect the government's plans to sell 80 percent of the utility to Southern Energy Inc., he said.
WAPA is assuming the new debt four months after the Turnbull administration agreed to sell the 80 per cent interest to the Georgia-based company for $105 million and cancellation of the government's $24 million in past-due electric bills, the latter a figure in dispute.
When informed of WAPA's decision to increase its debt by $10 million, Southern Energy spokesman Chuck Griffin said, "It is our understanding that WAPA is not supposed to be making any big changes or taking on any large capital expenditures."
Other informed sources said that under the government's agreement with the company — an agreement that Government House has not yet sent to the Legislature, which must approve it — WAPA may not incur new debt before the sale.
Rudolph Krigger Sr., assistant to the governor for fiscal and economic affairs, said he had not been informed of WAPA's decision and "it would be premature for me to comment."
Rothgeb said WAPA was forced to take on the new debt because of a lack of capital due to the government and other customers having failed to pay long-standing bills. "It is the cash shortfall due to the government owing us a substantial amount of money," Rothgeb said. "That is about $24 million. Right now, we are cash-strapped."

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The Water and Power Authority took out a $10 million loan Friday to fund the installation of underground electric lines to the hospitals and airports on St. Croix and St. Thomas, according to WAPA assistant executive director Glenn Rothgeb.
Both a top official of the company intending to buy majority interest in the utility and the governor's top economic advisor indicated that move the came as a surprise to them.
The action followed WAPA board approval Thursday for the utility to access a $20 million line of credit with Banco Popular and Chase Manhattan Bank and extend it for three years.
Rothgeb said the cable burying and utilization of the line of credit are part of ongoing development plans. The decision should not affect the government's plans to sell 80 percent of the utility to Southern Energy Inc., he said.
WAPA is assuming the new debt four months after the Turnbull administration agreed to sell the 80 per cent interest to the Georgia-based company for $105 million and cancellation of the government's $24 million in past-due electric bills, the latter a figure in dispute.
When informed of WAPA's decision to increase its debt by $10 million, Southern Energy spokesman Chuck Griffin said, "It is our understanding that WAPA is not supposed to be making any big changes or taking on any large capital expenditures."
Other informed sources said that under the government's agreement with the company -- an agreement that Government House has not yet sent to the Legislature, which must approve it -- WAPA may not incur new debt before the sale.
Rudolph Krigger Sr., assistant to the governor for fiscal and economic affairs, said he had not been informed of WAPA's decision and "it would be premature for me to comment."
Rothgeb said WAPA was forced to take on the new debt because of a lack of capital due to the government and other customers having failed to pay long-standing bills. "It is the cash shortfall due to the government owing us a substantial amount of money," Rothgeb said. "That is about $24 million. Right now, we are cash-strapped."