The new owner of Arctic Circle Air has initially agreed to repay the $600,000 loan the airline company had borrowed from the Commonwealth Development Authority.<\/p>\n
CDA director Manuel Sablan told Saipan Tribune yesterday that a repayment agreement is in the works between the agency and Arctic Circle, the cargo airline established by the late Anthony Pellegrino.<\/p>\n
\u201cThe loan agreement is being finalized by both attorneys [of the parties] after the new owner agreed to the terms and conditions,\u201d Sablan said, adding that the work is nearing completion.<\/p>\n
According to Sablan, the soon-to-be finalized deal will stipulate repayment terms of six months to a year until all obligations are settled with the authority. Included in the \u201cdefault payment\u201d is a 7-percent per annum interest, he added.<\/p>\n
CDA released the $600,000 to Arctic Circle in 2012 to be used supposedly as a pledge on the company\u2019s interim loan with the Rhode Island-based Independence Bank. <\/p>\n
Saipan Tribune learned that the $600,000 investment came with the condition that it would be converted into equity once the bank loan deal is finalized. However, that loan transaction never materialized. CDA now wants the $600,000 back.<\/p>\n
In an earlier interview with Arctic Circle vice president Paul Zak, he said the $600,000 was converted into a note, which is a contract stating the terms of a loan, such as the principal, the interest rate, and the payment schedule. This note was to be satisfied through monthly payments including accrued interest.<\/p>\n
Arctic Circle Air welcomed a new investor last year through president Hee Cho of JMSH, LLC, which owns Rota Resort & Country Club. The largest hotel property on Rota has chartered Arctic Circle Air for passenger services from Saipan.<\/p>\n
Cho is the majority shareholder, with investments of more than 51 percent in the airline company.<\/p>\n
Arctic Circle Air\u2019s representation at the beginning of its venture is to provide a bridge between the Northern Marianas and Guam to promote agricultural exports. However, this changed later when the airline launched its passenger services and attracted new investors.<\/p>\n
Zak disclosed that the company is now in the transportation business, which involves both cargo and passengers. <\/p>\n
Meantime, CDA director Sablan said that the agency is awaiting a court decision pertaining to the bankruptcy case filed by Freedom Air, which owes CDA $900,000, released as a loan in March 2012.<\/p>\n","protected":false},"excerpt":{"rendered":"
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