It won’t be known just yet how the move to delay paying the principal and interest on institutional investors holding Government debt will affect the Barbados Institute of Management and Productivity (BIMAP), its auditor has revealed.
The assessment came from Audit Partner at KPMG Andrew Brathwaite after auditing BIMAP’s financial statements as of last December 31, as he addressed BIMAP’s Annual General Meeting today.
Following Government’s suspension of debt repayments on June 1 and the restructuring of debt instruments, including treasury notes and debentures, domestic creditors had been asked to roll over principal maturities until restructuring agreements have been completed.
BIMAP currently holds four debt instruments worth $1,111,240 at year-end 2017, all of which he said were likely to be affected by the proposed debt restructuring.
“I can’t speak on behalf of BIMAP but management will have to sit down and look at the terms and the offer and assess the impact that it will have. It is probably too early to be any more specific than that.
“At this point, we won’t be able to quantify it. We have to work through the exercise and actually quantify it in that respect. The Institute of Chartered Accountants of Barbados (ICAB) is also looking at it and at some point ICAB will issue guidance on it, including how to quantify the impact generally,” Brathwaite said.
BIMAP’s pension plan which it
currently holds with Sagicor Life Inc would be less affected than other pension plans, he added.
Since the audit, dated August 14, 2018, was completed, Brathwaite said BIMAP had received the terms of the debt restructuring offer outlining the specific terms which would be applicable to them.
Under the new terms, BIMAP would still receive the principal of the securities, but with a significantly reduced interest rate, Brathwaite said.
The previous interest rate was in excess of seven per cent, but under the terms of the restructuring, the interest rate would shrink to as low as one per cent, to rise eventually to three per cent.
BIMAP collected $122,000 in cash during the year, but reinvested that money at 6.5 per cent, according to the audit report.
The business development institute now faced a deficit amid a decline in demand for its business consulting services and training courses, according to Chairman of the Board of Trustees John Rocheford as reported on the last year’s operations.
BIMAP now faced a deficit of $232,632 before depreciation; total revenue had decreased from $2,428,573 to $1,938 935, but the institute also spent less in the last year – from $2,437,913 to $2,171,567, Rocheford reported.
“The decrease in both revenue and expenditure was the direct result of the completion of the Competency-Based Training Fund (CBTF) project, a contraction of consulting activities and the lower demand for training by employers,” Rocheford said.