Bank puts loans to UTS Curacao on hold – UTS St. Maarten financially supports parent company

POSTED: 12/17/13 1:28 PM

St. Maarten / Curacao – Telecom provider UTS remains in financial dire straits and the pressure increased just before the weekend when the MCB bank decided to put a 95 million loan to the company on hold until the restructuring plans have yielded the necessary results. UTS in St. Maarten is currently financially supporting the parent company in Curacao, UTS-manager Glen Carty said yesterday.

“UTS Curacao is going through financially difficult times,” Carty said. “This is why the restructuring and the redundancy of 224 employees is necessary.”

The action by the bank does not come as a surprise, Carty said. “We knew this was going to happen. Everything is on hold until the restructuring has been implemented.”

UTS has reserved 48 million guilders for a redundancy program for employees that voluntarily leave the company. The departing employees will receive a tax-free package representing between 24 and 30 months of salary. According to Carty, the program is progressing “reasonably fast.” The deadline for signing on to the program is today.

“UTS St. Maarten has a reasonably good cash flow,” Carty said. “From 2004 on Curacao has always supported us financially. Now we have to support the parent company until it has this situation under control.”

The troubles UTS experiences in Curacao do not have a direct influence on UTS in St. Maarten, Carty said. Indirectly there is of course an effect, because St. Maarten is now providing financial support to UTS in Curacao.

Asked what would happen if UTS Curacao does not survive, Carty said that this is an unlikely scenario. “UTS has 95 percent of the landlines in Curacao. I do not think they will let it happen that UTS falls. Before it ever comes so far, the company would take the necessary measures.”

In the new structure there is still a role for the UTS subsidiary in St. Kitts, Carty said. The MCB-bank has demanded that the company sells this subsidiary, but Carty sees a different future. “At this moment I do not want to talk about selling St. Kitts. We have to make sure that it is no longer loss-making and that it starts to play a part in UTS Eastern Caribbean. That is feasible.”

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