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Arctic Circle, CDA finally ink 1-year repayment deal
After months of negotiations, a memorandum of agreement was finally hammered out between the Commonwealth Development Authority and Arctic Circle Air Co.
CDA executive director Manuel Sablan disclosed yesterday that both parties recently inked an agreement stipulating a one-year payment term for the airline’s outstanding obligation with CDA.
Arctic Circle Air owes CDA $600,000. The money was supposed to be used as a pledge for the company’s interim loan with the Rhode Island-based Independence Bank in 2012. This amount came with the condition that it would be converted into equity once the bank loan is finalized. However, that loan transaction fell through. CDA then demanded that the $600,000 be returned.
Sablan said yesterday that Arctic Circle has already made its first payment under the MOA.
“We’ve gone through with the issue on Arctic Circle and in fact, I understand that the company made its first payment a week ago,” he said.
CDA comptroller Donnie Militante confirmed with Saipan Tribune yesterday that Arctic Circle paid $55,846 on March 13 as its first payment. The airline firm is required to pay the same amount every month until all obligations are settled within 12 months. Included in the monthly payment is a 7-percent per annum interest assigned to the $600,000 loan.
Arctic Circle Air welcomed a new investor last year through president Hee Cho of JMSH, LLC, which owns Rota Resort & Country Club. The largest hotel property on Rota has chartered Arctic Circle Air for passenger services from Saipan.
Cho is the majority shareholder, with investments of more than 51 percent in the airline company.
Arctic Circle’s representation at the beginning of its venture is to provide a bridge between the Northern Marianas and Guam to promote agricultural exports. However, this changed later when the airline launched its passenger services and attracted new investors. The company is now in the transportation business, which involves both cargo and passengers.
