An invitation by Amalgamated Telecom Holdings(ATH) to existing shareholders to buy up more shares is still being considered by the Fiji National Provident Fund (FNPF).
FNPF is the major shareholder, owning around 72% of the telecom group.
"We are still assessing that investment," FNPF CEO Jaoji Koroi told Islands Business.
"It's a strategic investment for us. ATH has grown the past years into the Pacific and the rights issue is to fund that growth. Of course the environment now has changed (due to COVID-19) so we have to assess [it] differently," Koroi said.
ATH is listed on the South Pacific Stock Exchange (SPX) and announced late April an intention to raise F$126.76 million (US$58.32 million) via a 1 share for 6.66 rights issue, at a discount price of F$2 (US$.91) per share.
The rights issue, which was to have closed on June 18, has now been extended to July 17.
Around 8,000 members of the Fiji National Provident Fund (FNPF) now have less than F$35 in their General Account (GA) after exhausting it over COVID-19 assistance.
This was revealed by the Fund this week when it gave details of a second phase of assistance for members - to begin tomorrow (Friday June 5) with a payout of around F$1.7million ($220 each) to the 8,000 members.
"These are the members who came in during COVID 1 (COVID-19 Assistance Phase One) and have exhausted their GA balances. Why we have kept the $35? It is to cover their Special Death Benefits. So about 8,000 workers have between $0 and $35. For these 8000 members, the government will fully pay their assistance for the next five fortnights," said FNPF Chief Financial Officer Pravinesh Singh.
Phase 2, announced by government last week, will see FNPF members unemployed due to COVID-19 dipping again into their own accounts for a total of $1,100 per member, paced out in five fortnightly payment of $220 per fortnight, with those having less than $1,100 to be topped up by government.
Category 1 of Phase 2, which comes into force today, caters for 8,000 members, according to Singh.
While the first $220 will be directly deposited into their bank accounts this Friday, they will only qualify for the next fortnight's $220 and subsequent installments if they are able to verify, via their previous employer, that they are still unemployed.
Singh said the Fund expects total value of assistance for this first group to be at around F$8.8 million, if all 8,000 members qualify for the duration of the five fortnights.
Category 2 and 3 of Phase 2 will be activated on June 9, with total value dependent on number of applications approved.
The FNPF, a compulsory pension scheme for Fijian workers, maintains a 70/30 access rule for each member, where 70 percent of a member's account is preserved for retirement (Preserved Account) and 30 percent is for members to access for a list of approved benefits such as housing, unemployment and education(General Account).
According to CEO Jaoji Koroi, this 70/30 rule was instituted in 2012 following a reform of the Fund and this has helped build up members' Preserved Account from F$2.5billion in 2014 to F$4.72 billion at the end of June last year.
While confirming FNPF's participation in the Fiji Government-guaranteed loan facility of F$455 million (US$207 million) approved by Parliament last week, FNPF CEO Jaoji Koroi said interest payments, deferment and related issues will be discussed with the borrower under the Fund's new lending facility, in which its borrowers can make suitable arragements in light of difficulties faced due to COVID-19.
"FNPF has always had a strategic relationship with Fiji Airways. We're a long term investor and we see Fiji Airways as a strategic asset for Fiji because tourism is quite important and having a strong airline is crucial for our investments in the tourism sector. As you know after the Global Financial Crisis, we had that investment with Fiji Airways through a loan and that has yielded good results over the years. In fact, members have received close to $65.1million in interest from that lending facility since then. We're going through a very important cycle, and we still need to look to the future. We still need that strategic asset to grow and continue to bring back what we all look forward to, which is a strong tourism sector," Koroi said.
"It's a matter of looking over the next two years or so, we understand the capacity and what needs to be done. I think Fiji Airways has also done internal restructuring of their balance sheet in terms of what to let go and what to keep, so that it can be a finer company that we can improve. So we're looking at participating in that facility and because it's now a government guarantee, we're taking a risk on the lending." Koroi said.
Attorney General and Minister for Economy Aiyaz Sayed-Khaiyum detailed the loan structure in Parliament last week as comprising domestic borrowing (F$191.1m) and offshore borrowings (U.S$117.1m), or a total of F$455million spread over a three year period, effective May 30, 2020.
"Companies like ADB and all these international funding agencies are also looking to be part of that facility, so I think the message is: ok, two years is going to be tough but we need Fiji Airways to come out strongly for the future of the country," Koroi said, when asked about the likelihood that the national airline may not be able to pay anything in the first year since tourism is still crippled.
As revealed by Sayed-Khaiyum last week, $56.3 million is coming from FNPF while the rest will be borne by other local agencies including the Reserve Bank of Fiji and ANZ Bank.
FNPF, whose exposure in the tourism sector is around 16 percent, owns most of Fiji's major hotels and hotel properties in Fiji's tourist belt in Nadi as well as in Suva.
*Editor's note: This article was updated on June 5 after FNPF provided updated figures.
The Fiji National Provident Fund says its has paid out F$49.1 million (US$22m) to 77,507 members under the COVID-19 withdrawal scheme, with most applications now processed.
The FNPF says 86,854 applications in total were lodged, and close to 4,600 members will be paid out this week.
Government subsidies accounted for more than $6.67 million, the remainder came from members’ own funds.
Chief Executive Officer Jaoji Koroi says withdrawals related to Tropical Cyclone Harold continue as well. The FNPF has received around 722 applications for that withdrawal scheme and paid out $797,194 to 606 members. “Our teams have completed inspection for the maritime zones – specifically for Kadavu, Vatulele and a few islands in the Lau Group,” says Mr Koroi. “Majority of members contacting the Fund do not live in the affected area but their homes were damaged. These members have been advised to apply for the housing assistance scheme to repair their homes provided they meet the qualifying requirements”, Mr Koroi adds.
The TC Harold withdrawal scheme only targeted members whose homes were damaged and also reside in areas that were declared a natural disaster area by the National Disaster Management Office.
The Fiji National Provident Fund is eyeing good bargains in the assets-for-sale space, as the coronavirus pandemic coughs up distressed companies either looking for cash or offering themselves up for sale.
FNPF CEO Jaoji Koroi said while the pandemic will affect its overall investment returns, considering its exposure to overseas share markets as well as the now crippled tourism sector locally, there are also buyout opportunities that the fund will explore.
"One of the key advantages of the fund is that it is a long term investor. We're here for the long term so, of course the first few years (of recovery) will be a problem but this is also a good opportunity to pick up good assets. A lot of assets will be there at discounted prices so we're preparing our cash flow based on that too, with that (buying discounted assets) in mind," Koroi told Islands Business in a press briefing in Suva today.
As Fiji's only national forced-savings pension fund for workers, the FNPF, via government regulations, has played a central role in coming to members' rescue in events of natural disasters, including the current coronavirus pandemic, which has been declared a natural disaster in Fiji.
With over F$710 million is cash and term deposits in its balance sheet, the Fund said it has enough liquidity to pay out members eligible for its COVID-19 assistance, attend to its normal members services as well as to invest.
"Cash is king during these times so if you have cash, you get the opportunity to look for good assets," Koroi said.
The Fund is expecting the impact from the statutory reduction in employees and employers' contributions - announced by government as a form of relief for workers and businesses in its COVID-19 response budget last month - and the current unemployment scenario in Fiji to begin reflecting in its cash flow from next month.
"Based on what we're receiving for March and February collection, we're still meeting our target, which is about F$50million per month of contributions. We'll be receiving the April contributions in May so that will start to reflect the reduced contribution rates as well as the unemployment now. We're factoring that into our cash flow moving forward," Koroi said.
Also on the casualty list is the Fund's offshore investments, particularly its stakes in the global stock markets, which are currently experiencing historic lows as major economies enter recession territory as a result of the COVID-19 crisis.
"We have an exposure there of around F$70million, all in the Australian market. We've seen a reduction of around 23 percent in the value of that. We're booking that on a daily basis so the impact is really flowing into the income statement, so, on a daily basis, the impact of those losses are in our books. It used to be F$70million, now it's about F$50million," Koroi said.
FNPF has a diversified offshore investment portfolio and owns shares in other unlisted securities such as in the BSP Bank in Papua New Guinea, which Koroi said have performed well and will offset losses in its stock market investment.
The fund is also expecting a big dent in its tourism investments, which represent around 16 per cent of its total investment portfolio.
Koroi said it is using the current stand-still in tourism to refurbish its hotels, among them the Sheraton and Westin hotels in Denarau. Also on the cards is a new contract with an international hotel management chain to manage its Suva-based Grand Pacific Hotel.
The Fund is however expecting positive results from its investment in government securities, particularly its returns from government bonds, which comprises around 40 per cent of its total investment portfolio.
Koroi assured members that their retirement fund is safe as it has in reserve more than what is required of it by law to reserve and to remain solvent.
"We're a long term investor so we're able to ride the lows and highs of every economic cycle," he said.
FNPF so far has over F$7.4 billion in total assets and $6.1billion in members' funds.