U.S. Investors to buy off Cross River’s N123.9b debt liability
POISED to take Cross River State into the mainstream of business diversifying, the governor elect of the state, Professor Ben Ayade, has concluded plans with US investors to wipe out the state’s N123.9 billion total debt profile.
Already the US investors and others have arrived Calabar since April 14 and have been holding talks with the governor elect as they proposed to invest over $600 million to buy off the state’s N123.9 billion huge debt.
Briefing newsmen in Calabar , Professor Ayade said “all the core investors that have been talking with me, the whole essence is how we can package our debt and turn it into an asset. I have a motto that every single debt that we’ve got, we’re packaging it for sale and of course the essential element in economics is that if you want to convert a liability to an asset, you have to present the fundamentals to be attractive and exciting.
“First let me say that I am inheriting a very robust economy. That we owe as a state does not make it bankrupt. You can actually covert a loan to an asset. It all depends on the management style you bring in. Cross River State is indeed a very vibrant economy with very huge natural resources. Even though most of them will still fall under the Exclusive List of the Federal Government, I do believe that we are going to have a healthy relationship with the centre.
“ I do believe that it is possible for us to actually give the economy a robust change that is expected. In spite of the looming climate that one may be looking at, the truth is, for every single challenge, there is always a root. My conviction is that I am going to bring in all my business acumen and the exposure and contact to bear on Cross River State to reconstruct and re-fabricate a new economy so that we can shift away from dependence on federation account, isolate the state and run it as a business model. I do believe we can convert the debt to a huge asset”.
According to him, “we are going to do asset assessment to look at the resource base of Cross River state so that we can take off over $600 million loan that is about N120 billion to free us from the burden of running an interest regime of over 26 percent”.
He explained that “the foreign investors coming are third parties, (Moga Stanley), huge financial dealers who hold private equity and look for where they can invest. In America if you have an interest of six per cent, it is a huge business for who owns the capital. The law puts you on venture capital of 1.5 percent.
“So if they take off $600m loan and take it off from a bank that Cross River state is paying 26 percent without some default rates in addition and they are making six percent kill and they have our forest over one million hectres of forest reserve for the production of ply boards and veneer for export with a condition of planting three trees for everyone they fell and they see that this forest is the second thickest forest to the amazon in the entire world they will come in.