MPLT Board Chairman Alvaro A. Santos told Variety, “The Arctic Circle Air proposal for equity investment by MPLT was defeated by a majority vote.”
The MPLT board held a meeting last week where it discussed in executive session whether to approve the Arctic proposal.
Arctic Circle Air, which recently was able to get a loan with Independence Bank of Rhode Island secured by the Commonwealth Development Authority’s $600,000 security deposit, was asking MPLT if it could invest $200,000 in the business venture.
Just recently, Arctic acquired a $400,000 Britten-Norman, nine-passenger, 2,500 lb. plane in London that it had flown to Fairbanks, Alaska for recertification with Federal Aviation Administration. It hopes to bring the aircraft to Saipan from middle to end of January 2012.
Santos said not only did the board opt not to invest in Arctic, “future loan proposals may be off the table too because collateral (prescriptive issue) may have already been committed to other financial institution(s).”
MPLT approved a $500,000 loan to Arctic for 10 years at 7.5 percent interest with business’ aircraft, flight certification, accounts receivables, furniture and fixtures and other capital assets, inventory of parts, and non-perishable items as collateral.
Recently, Arctic decided to forego the MPLT loan in lieu of an equity investment proposal for $200,000.
At the same time, Artic is working on obtaining a $3 million loan from Independence Bank guaranteed by the United States Department of Agriculture.
In an earlier interview with Variety, Arctic Circle Air president Anthony Pellegrino expressed his optimism in the project.
Arctic is expecting to receive the bank’s decision later this month.
