On Friday we reported that government is weighing a proposal to offer the public its 10% equity in the Spanish Lookout oil field. According to our sources, it will be advertised as an opportunity for twenty thousand Belizeans to benefit from the oil industry.
But the bad part is that our sources told us that government was weighing the possibility of using the proceeds from the sale to settle the Universal debt with the Belize Bank. And that is particularly because the price that BNE has come up with for the equity is exactly $33 million - same as the Universal debt - a striking symmetry.
Sounds like a perfect fit, but today government sent out a Release saying that it will not swap its oil equity to settle the debt. Of course, we never said it would swap anything. We said it was considering using the proceeds to settle this debt.
Speaking with Prime Minister Said Musa via telephone today about the possibility that the proceeds of the sale could be used to settle the Universal debt, he would only tell 7NEWS that, quote: "money is fungible."
That's a term he's used to us many times over the years, but what does it mean? Well, in simplest terms, fungible means interchangeable. And in this context, we take it to mean that when government gets the proceeds in cash from the sale of its shares, it could use that' same cash to settle the Universal debt.
But the Prime Minister told us that the issue of that debt has not been resolved, and he alluded to the fact that government was not convinced that it had to pay all $33 million in one lump sum.
7NEWS has confirmed that BNE proposes to underwrite the share offering. Underwriting means that BNE and its partner CHX would pay government up front US$16.5 million for the shares. And then it would be offered to Belizeans. The good part for BNE, as the underwriter, is that whatever the public doesn't buy, BNE would then scoop up for itself - having already paid the government up front.
Again, that is the proposal, but with the Belize Bank demanding its money, and BNE eager to get underway with the $33 million underwriting, there is some urgency to it.
