The Opposition Leader Lauofo Pierre Lauofo has called on the Government "to be fair" to all the hoteliers in the country if they are serious about reviving the hotel industry as part of its preparations to host international meetings next year. 

The call from the veteran MP for Anoama'a No.2., follows a report from this newspaper that the Government now owns 30 per cent Aggie Greys Hotel Limited which owns the Sheraton Samoa and Aggies Greys Hotel & Bungalows in Apia.

Lauofo is of the view that the government should be fair to all the hoteliers in the country and treat them the same as the big hotels in town. 

"The government says it will try to offer financial restructuring for other hotels that were insolvent or foreclosed," he told this newspaper 

"What about the rest? All hotels struggled through COVID-19 lockdowns and restrictions and are still being charged 8 percent interest, whereas this Chinese-owned hotel-now with 30 per cent Government shareholding gets 3 per cent interest. 

"Some local hotels had to fight hard to qualify for the $100,000 concessional Development Bank Samoa (D.B.S.) loan, as they were informed at the beginning that they were not eligible for this facility. 

"If the Government is serious about reviving the hotel industry, then it must be fair to all to allow all hotel properties to be restructured financially, grant a grace period of 12 months to all other hotel properties and charge 3 percent interest on all other hotels properties like Sheraton."

Lauofo said this assistance would be very helpful as local hotels are going through the revival phase after COVID-19. 

"This is particularly important as our country is making preparations to host Commonwealth Heads of Government Meeting and other international conferences regarding which it has appropriated an inadequate amount of $20 million in the current budget appropriations 2023/2024."

This newspaper reported earlier this week that the Government now holds 30 per cent preference shares in the Aggie Greys Hotel Limited which owns the Sheraton Samoa and Aggies Greys Hotel and Bungalows in Apia.

This was confirmed by the Minister for the Ministry of Public Enterprises (M.P.E.) Leatinu'u Wayne So'oialo during an interview with Radio Samoa over the weekend. 

According to Leatinu'u, the shares worth SAT$ 30 million of Aggie Greys Hotel Limited’s mortgage with the Development Bank of Samoa (D.B.S.) are for a loan, which dates back to 1993 under the former Administration. 

The intervention by the current Government, said Leatinu'u, is based on the national interest having considered the premium facility and location of the hotel. This was done against the backdrop of Samoa hosting the Commonwealth Heads of Governments Meeting (C.H.O.G.M.) in October 2024, when the expected guest numbers for the summit are likely to exhaust all major and premium accommodation venues in the country.

Leatinu'u said Cabinet had also endorsed offering a "grace period" for all the local hotels which were put up for auction after they failed to make repayments for their loans with the D.B.S. The objective is to give local businesses the opportunity to come back and prepare for the C.H.O.G.M. next year. 

He said the Minister of Finance, Mulipola Anarosa Ale-Molio'o was invited by the China-based parent company of Aggie Greys Hotel to negotiate their agreement's new conditions. 

The Aggie Greys Hotel Limited loan from the D.B.S. was funded by a credit line facility through the Central Bank of Samoa. However, when the hotel was sold to Chinese business interest, the hotel's former owner’s debts with other banking institutions in Samoa were cleared except for the one with the D.B.S. which remained unpaid. 

Hit by major flood damage in 2018 – and with Samoa's tourism industry coming to a standstill due to the Covid-19 pandemic lockdown – the hotel's new owners were stuck and later learnt that there had been efforts to liquidate the company and buy back the hotel at a much lower price.

This newspaper understands that the current owners will fund all the repair and upgrade works to be done for the hotel for a period of 8-10 months at the cost of SAT$42 million. But while SAT$30 million of the mortgage has been transferred as the Government's shares, there is still an outstanding balance of SAT$22,608,507. 

The Cabinet has set the conditions for the repayment of the mortgage balance of this amount as granting a grace period of three years starting January 2023-December 2025; charging loan interest of 3 per cent effective from January 2026; monthly loan repayment of $220,000 effective from January 2026; loan period of ten years; finalising other related conditions including insurance for the hotel and its assets.

The amount owed in the credit line facility made available through the Central Bank of Samoa (C.B.S.) to the D.B.S. now stands at SAT$37 million. The Cabinet has also directed the D.B.S. to discuss with the C.B.S. remedies to help with the repayment of the SAT$37 million, the D.B.S. to discuss with the Ministry of Public Enterprises and the Ministry of Finance its proposal for possible reclassification of its status as a public trading body, and the appointment of the C.E.O. of the D.B.S. as a member of the Aggie Greys Hotel Limited Management Board. 

The D.B.S. is also directed to submit to Cabinet progress reports on this task, every six months, commencing April 2023. The Aggie Greys Hotel Limited loan arrangements and payments are one of the projects listed under the Forensic Audit investigation. The arrangement of the credit line facility to the D.B.S. puts the spotlight on the Central Banks' regulatory role.