PHILIPSBURG/MINNEAPOLIS--American multinational investment bank Piper Sandler and Co. has offered to finance the reconstruction of Princess Juliana International Airport (PJIA) in a letter sent to a host of local high-ranking officials on Wednesday.
This letter was signed by Piper Sandler and Co. managing director John Coan and comes directly on the heels of the World Bank warning last week that the reconstruction funding for the airport terminal project was in jeopardy if there is a management shake-up at PJIA operating company PJIAE.
In December 2020, PJIA holding company PJIAH requested PJIAE chief executive officer (CEO) Brian Mingo to tender his resignation immediately, citing a growing lack of confidence in his leadership and delays in the reconstruction project. The holding company warned Mingo at the time that failure to leave the post voluntarily by January 4, 2021, would result in the company pursuing legal termination – a warning which Mingo has subsequently ignored.
Coan writes in the letter that his bank was in talks with PJIAE in 2018 to implement a finance plan to restructure the airport’s outstanding debt and raise capital for the terminal’s reconstruction.
“We, along with other members of the finance team, drafted a near final bond trust indenture which proposed more favourable business covenants for the company and cured the existing default, developed an investor disclosure document, prepared a rating presentation for Moody’s Investor Service, negotiated terms for a bridge loan to provide needed liquidity, and identified several investors who were interested in purchasing the new debt, including banks and infrastructure funds,” wrote Coan.
Piper Sandler and Co. were close to finalising the financing agreement in early 2019, having raised approximately US $220 million, according to Coan. “We were told to stop working in 2019 and were paid a termination fee in 2020 per the terms of our engagement,” it was stated in the letter. It should be noted, Mingo was appointed CEO in January 2019.
In the wake of the World Bank’s warning and government announcing that it would have a hands-off approach to PJIAE’s personnel affairs, Piper Sandler and Co. appear eager to resume where they left off.
“We stand ready to implement the original finance plan. Annual debt service for the company is currently $14 million, which is a high debt burden in a post-COVID environment, and a restructuring of the debt would be beneficial to the company by lowering annual debt service payments.
“In addition, we can raise additional capital to cover any cost overruns on the terminal reconstruction. The capital markets are fully functional and have eagerly purchased airport-related debt offerings. We would be glad to offer a more detailed finance plan upon your request,” the letter concluded.
The letter was sent to Prime Minister Silveria Jacobs; Finance Minister Ardwell Irion; Minister of Tourism, Economic Affairs, Transport and Telecommunication (TEATT) Ludmila de Weever; Parliament Chairperson Rolando Brison; Mingo and PJIAE chief operations officer (COO) Michel Hyman; PJIAH managing director Dexter Doncher; and other members of PJIAH’s supervisory board.
Piper Sandler and Co. is an independent investment bank and financial services company based in Minneapolis, Minnesota. The company was founded in 1895.
