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SMMC positive about meeting with INSO and lenders

SMMC positive about meeting with INSO and lenders

Cay Hill - Last week, SMMC met with the Extraordinary Commissioners (EC’s) of INSO, the contractor of the new St. Maarten General Hospital, and the consortium of the lenders with Minister of VSA Emil Lee in attendance regarding the status of the project.

The EC’s were appointed by the Italian Government following the admittance to the Extraordinary Administrative Procedure (EAP) in December 2018 in order to guarantee the continuity of INSO’s business. The EC’s stressed that the St. Maarten Hospital project has been carefully evaluated and that they determined that the project is part of the company’s strategic vision. They then went into a detailed presentation on why they are financially able to guarantee completion of the new hospital.

 

INSO assured SMMC and the lenders that, if final approval is granted, it can begin onsite mobilization as early as July 2019 and be positioned to begin the main construction in the third quarter of this year. If all goes to planning the main building will then be opened two and a half years later.

 

SMMC’s General Director, Kees Klarenbeek, welcomed this plan on the condition that all required documentation and guarantees are completely in place before the site mobilization can occur.

 

Minister Lee made a presentation on the role of the Ministry of VSA and the national health reform process which includes changes to referral program, tackling high costs of prescription drugs, BIG legislation for St Maarten, General Health Insurance and of course the new general hospital was is a critical part of the reform process. 

 

The INSO crisis was mainly a combination of the economic and financial crisis in the construction industry in Italy and the problems with Condotte d’Acqua, the parent company of INSO. “We are carrying out a plan aimed at the sale of the INSO’s assets without its liabilities, through and at the preservation and enhancement of the company’s assets, activities and operations on a going concern perspective”, stated the EC’s.

 

“With the support of the Italian Government we have secured financing equal of Euro 30 million which will be used to comply with all the contractual arrangements of the Sint Maarten Hospital Project. Such obligations include the extending and increasing of the already existing performance bond to an amount of almost USD 8 million and submit an advance payment bond of USD 3 million. As a result of the EAP and the financial support that we received, INSO is financially strong enough to comply with all its obligations of all the ongoing projects and new projects”, the EC’s stated.

 

In addition to the aforementioned, INSO is working with SMMC and the lenders to provide additional comfort and or guarantees.

 

“We have the funds and the resources to complete the General Hospital in St. Maarten”, said the ECs. The Sint Maarten General Hospital is part of the program that will be submitted to the Italian Ministry of Economic Development before June 5th, 2019.

 

“We do expect that the Ministry will approve this program within one month and then we will start with the sale of the company to a well-qualified buyer. This will take 6 to 12 months. The whole idea behind the EAP is to continue the business and the safeguarding of INSO’s resources. In order to safeguard this, the new owner has to provide a very substantial performance bond to the Italian Government and we, the ECs, will be monitoring that this new owner will live up to his obligations for at least a period of 2 year after the sale is completed. Nothing will change for the construction of the new St. Maarten General Hospital, we will use the same architect, the same subcontractors and above all the same people of INSO”, concluded the EC’s.

 

Kees Klarenbeek added that the meeting was very informative and constructive. “It is good to hear from the decisions makers from INSO what the actual situation is and what INSO’s plans are. The new hospital of St. Maarten is too important for the people of Sint Maarten, Saba and Sint Eustatius and our visitors, we need to ensure that the construction will be done according to the plan and the budget. This meeting confirms that this will indeed be the case”, Klarenbeek stated.

 

He continued: “We made some firm agreements and INSO has now to deliver the financial guarantees and the other documents as discussed which will not only be reviewed by SMMC but also by our lenders consortium. It is our aim that before the end of June 2019 we will have all guarantees in place after which we can finally start with the mobilization of the project as we already have the building permit and SMMC and INSO continued to work on the final design since December 2018”, Klarenbeek concluded.

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