SINPF Board Mission, Growing Members Wealth - Letter to Editor Solomon Star
In the recent past, your paper had published several commentaries on some of the Fund’s investments. I would like to generally clarify and one in particular by the MMF President on Solomon Telekom Company Ltd (STCL) past dividends declared by the company for its shareholders - the SINPF members’ and Investment Corporation of Solomon Islands (ICSI).
This clarification is to affirm that these dividends were made for our members’ income for those years and are within the rules of the company.
To support the company’s liquidity the SINPF Board converted the dividends into a shareholder’s loan with STCL (now sitting in the Fund’s investment portfolio as a debt asset) to be repaid over a period of time at an interest rate of 5% pa. The interest earned and paid provided an additional income stream for our members, for the period the shareholder loan is consistently being paid down, until completion.
As part of the company’s strategic direction after the deregulation of the telecommunications industry to prepare for competition and to remain competitive, the company commenced shedding off its non-core and excess assets. The company is only to maintain and invest in assets that are relevant to its core business.
One of the company’s non-core assets is the Telekom Recreational property at Ranadi. This property with its strategic location has various options for investment opportunities that met the investment objective of the Fund.
The Boards of the SINPF and STCL successfully negotiated and completed a sale and purchase agreement enabling the property to remain within the Fund’s investment portfolio after approval was obtained from the Minister of Finance in July 2018. Part of the settlement price of $34 million was applied to the STCL shareholders loan for a further reduction.
The audited fair value of the Fund’s 97.32% shares in STCL has improved to $350 million as at 30 June 2018 driven by the company’s profitability, cash flow and debt levels.
The SINPF is a long term retirement investment fund and there are risks in all investments we make, in the Board’s mission to achieve a sustainable income growth through real returns (above inflation) for our members.
Within our investment portfolio we will have low performing assets that we will flag for extra attention to manage for a credible solution and or to recover. Two such assets are our property investment assets; 1) the slipway at Tulagi, Central Islands Province and 2) the Resort at Tavanipupu Island in Marau Sound, East Guadalcanal.
It will take time and challenging to work through these whilst we continue to work to grow our members’ wealth for when they turn 50 years or over 50 years, should they wish to continue have their contributions remain with the Fund.