Act No. 38 of 1961
BAHAMAS ELECTRICITY CORPORATION LOAN |
An Act to
provide for the raising of a loan by The Bahamas Electricity Corporation by the
issue of Debenture Stock, and to provide for payments of interest and principal
secured by such stock to be guaranteed by the Government of The Bahama Islands,
and to declare certain terms and conditions applicable to the issue of such
stock. | 38 of 1961
46 of 1963 |
[Commencement 31st
July, 1961] |
WHEREAS by section
14 of the Electricity Act it is provided that the Bahamas Electricity
Corporation may, with the consent of the Legislature, borrow money by the issue
of debentures or debenture stock for certain purposes; and |
WHEREAS by section
15 of the said Act it is provided that the Government may guarantee the payment
of the interest and principal of any loan secured by such debentures or
debenture stock in such manner and upon such terms as the Government may think
fit; and |
WHEREAS by section
17 of the said Act it is provided that the revenue of the Bahamas Electricity
Corporation shall be applied in manner therein set out; and |
WHEREAS it is now
deemed expedient that the Bahamas Electricity Corporation should raise a loan
in accordance with the provisions of the Electricity Act; and |
WHEREAS Corbin
International Trading Company Limited, a company incorporated under the laws of
the Bahama Islands, has agreed to purchase debenture stock of the Bahamas
Electricity Corporation; and |
WHEREAS the
agreement of Corbin International Trading Company Limited to purchase the said
debenture stock of the Bahamas Electricity Corporation is conditional, inter
alia, upon the Government guaranteeing the payment by the Bahamas
Electricity Corporation of the interest and aggregate principal sum secured by
the said debenture stock: |
1. This Act
may be cited as the Bahamas Electricity Corporation Loan Act. | Short title. |
2. In this
Act, unless the context otherwise requires- | Interpretation. |
"the Act"
means the
Electricity Act; |
"the Board"
means the Public Board of Works for New Providence, constituted under the
Boards
of Works Act; |
"the Company"
means Corbin International Trading Company Limited; |
"the
Corporation" means the Bahamas Electricity Corporation constituted under
the Act; |
"debenture
stock" means the debenture stock to be issued by the Corporation pursuant
to the provisions of this Act and to be secured by the mortgage and trust deed
hereinafter mentioned in this Act; and |
"dollars"
means dollars in the currency of the United States of America. |
3. It shall
be lawful for the Corporation to issue debenture stock the terms of issue of
which shall provide, inter alia, the following: | Corporation may issue
debenture stock. |
(a) The
debenture stock shall be in the principal sum of eleven million dollars and
shall constitute a registered security freely assignable and transferable from
time to time and at all times by the respective holders thereof. |
(b) The
debenture stock shall be dated the first day of June 1961, and shall be payable
on the first day of August 1981, or on such earlier date as may be thought fit
by the Corporation and in accordance with the provisions for earlier redemption
as this Act provides. In the event of any default in the payment of the
interest to become due on the debenture stock or on any breach or non-observance
by the Corporation of any of the covenants on the part of the Corporation to be
contained in the mortgage and trust deed hereinafter referred to the principal
moneys secured by the said mortgage and trust deed and the debenture stock and
all interest due thereon shall become payable: |
Provided,
however, that the same shall only become payable in the event of default in the
payment of interest if such default shall continue for twenty-one days after
such interest shall become due and at least ten days' notice shall have been
given to the Corporation and to the Government requiring the Corporation to pay
the interest in arrears or in the event of a breach or non-observance of
covenant if the same shall not be remedied within thirty days after notice
shall have been given to the Corporation and to the Government requiring the
Corporation to remedy the breach or non-observance of such covenant. |
(c) The
debenture stock may be issued either in fully registered form in denominations
of one thousand dollars, or in multiples thereof, or in registered form with
coupons attached in denominations of one thousand dollars, five thousand
dollars, ten thousand dollars, fifty thousand dollars and one hundred thousand
dollars or in multiples thereof. |
(d) The
debenture stock shall secure the right to interest at the rate of five and one-half
per centum per annum on the principal sum secured by the debenture stock from
the first day of June 1961 until redemption. |
(e) The
debenture stock after issue shall be sold by the Corporation to the Company in
the City of Montreal in the Province of Quebec in Canada or at such other place
as may be mutually agreed by the Corporation and the Company on the first day
of November 1961, or as near to that date as may be mutually agreed by the
Corporation and the Company at a purchase price equivalent to ninety-one and
one-half per centum of the principal amount secured by the debenture stock
together with the total accrued interest from the first day of June 1961 down
to and including the actual date of the sale of the debenture stock. |
(f) Each
certificate issued in respect of debenture stock shall have annexed thereto
detachable coupons in respect of the interest payable on the debenture stock
represented by such certificate. |
(g) The first
payment of interest in respect of the debenture stock shall be made on the
first day of February 1962 and thereafter interest payments shall be made semi-annually
on the first day of August and the first day of February in each year, in each
case upon presentation of the relevant coupons. |
(h) The
Corporation shall be entitled at its option on the first day of August in each
year commencing in the year 1972 by one year's notice given in respect of each
such redemption to redeem debenture stock in the principal sum not exceeding
five hundred and fifty thousand dollars at par and this right in the
Corporation shall be a cumulative right so that if not exercised in any one
year it may be exercisable in any later year provided that the Corporation
shall not be entitled in any one year to redeem in accordance with the
provisions of this subsection debenture stock exceeding the principal sum of
one million one hundred thousand dollars. |
(i) In
addition to the foregoing, the Corporation shall be entitled on or after the
first day of August 1971 to redeem all outstanding debenture stock upon ninety
days' notice at a redemption price being the principal sum secured by the
debenture stock to be redeemed together with a premium thereon calculated as
hereinafter provided. If the date of redemption specified in the notice of the
Corporation shall be on or after the first day of August 1971 and on or before
the thirty-first day of July 1972 then the premium for redemption shall be six
per centum, and if the date of redemption so notified shall fall within the
next succeeding twelve months thereafter the premium for redemption shall be
five and three-quarters per centum, and the premium shall reduce accordingly by
one-quarter of one per centum for each period of twelve months thereafter which
shall elapse without the Corporation electing to redeem in accordance with the
provisions of this subsection. |
(j) Notwithstanding
the provisions of section 4 of The Electricity Act, for the purposes of this Act any documents
required to be executed by the Corporation or any officer thereof in pursuance
of the provisions of this Act shall be deemed to be sufficiently executed if
such documents bear a facsimile of the signature of the proper officer or
officers which such facsimile may be affixed, imprinted or otherwise reproduced,
and if such documents bear a facsimile of the seal of the Corporation impressed,
affixed, imprinted or otherwise reproduced. Such facsimiles may be affixed, imprinted,
impressed or otherwise reproduced by any person authorised so to do by the
mortgage and trust deed made under the provisions of section 4 of this Act. |
(k) The
Corporation may make provision for a sinking fund for the retirement of the
debenture stock and for optional redemption in accordance with the terms of the
said mortgage and trust deed made under the provisions of section 4 of this Act. |
4. (1) The
debenture stock (and the principal moneys thereby represented and the interest
to become due thereon) shall be secured by a mortgage and trust deed to be
dated the first day of June 1961 and to be made between the Corporation of the
first part, one or more corporations or persons who by agreement between the
Corporation and the Company shall be appointed trustee or trustees for the
holders of the debenture stock of the second part, and the Government acting by
the Treasurer of the third part. | Debenture stock to be
secured by a mortgage and trust deed. |
(2) The deed
referred to in the immediately preceding subsection shall contain the terms, provisions
and covenants hereinafter in this subsection mentioned, and in addition may
contain such other terms, conditions, provisions, agreements and covenants as
may be agreed between the Corporation and the Company and as shall not be
inconsistent with anything contained in this Act, namely: |
(a) a first
legal mortgage upon and over all fixed assets of the Corporation existing at
the date of the debenture stock and a floating or other charge upon and over
all other assets of the Corporation existing at the said date as well as a
charge on all assets acquired by the Corporation thereafter (other than fixed
assets which the Corporation agreed to purchase before the first day of June 1961
and on which the Corporation agreed to create a first charge by way of mortgage
to secure part of the purchase price thereof); |
(b) a first
charge on all revenue of the Corporation remaining after payment of the current
operating expenses as defined by paragraphs (a) and (b) of subsection (1) of
section 17 of The Electricity Act provided that such first charge on such
revenue shall not attach except in the case of default in payment of the
principal moneys represented by the debenture stock or default in payment of
the interest due thereon; |
(c) a covenant
by the Government unconditionally guaranteeing the payment of all principal
moneys represented by the debenture stock and of all interest to become due
thereon; |
(d) a covenant
by the Government that so long as any debenture stock remains unredeemed no
taxes, duties, financial assessments or impositions of any kind (whether by way
of income or withholding taxes or stamp or probate duties or otherwise
howsoever) shall be created, charged, levied or collected by the Government
upon, against or in respect of the debenture stock and the principal moneys
thereby represented or against the interest payable thereon or upon any
assignment, transfer or transmittal of the same; |
(e) a covenant
by the Government that notwithstanding the provisions of The Exchange Control Regulations Act and
any Finance Regulations made thereunder, or any other Act whatsoever, so long
as any debenture stock remains unredeemed the same and every part thereof shall
be freely assignable and transferable from time to time and at all times by the
respective holders thereof, and the principal moneys represented by the
debenture stock and the interest payable thereon shall be payable in dollars
and shall be freely transmittable to every person entitled thereto who is a
resident of the United States of America or Canada or who is a resident of any
other part of the world not comprised within the Scheduled Territories; |
(f) a covenant
by the Government that so long as any debenture stock remains unredeemed all
ordinary stock issued to the Government pursuant to the provisions of paragraph
(6) of section 28 of the Act shall remain vested in the Government and shall
not be transferred, charged or otherwise disposed of; |
(g) a covenant
by the Government that so long as any debenture stock remains unredeemed the
provisions of section 19 of the Act shall remain in full force and effect and
that all payments made by the Corporation in respect of the principal moneys
represented by the debenture stock and in respect of the interest to become due
thereon shall be payments of outgoings by the Corporation properly chargeable
to income in all respects within the meaning of section 19 of the Act; |
(h) a covenant
by the Corporation not to create any charge whatsoever on its assets or revenue
ranking prior to or pari passu with the charges to be created by the
said deed hereinbefore referred to and the debenture stock excepting and
reserving to the Corporation the right to create charges ranking prior to or pari
passu with the said deed and the debenture stock on any real or personal
property acquired by the Corporation after the issue of the debenture stock in
favour of the vendor thereof but to the extent of one half of the purchase
price thereof only. |
(3) Nothing shall
be included in the said deed hereinbefore in this section referred to as to
prevent or in anywise restrict the statutory right of the trustees named
therein to appoint a receiver or receivers of the mortgaged property. |
(4) The Treasurer
on behalf of the Government shall execute and deliver the said deed
hereinbefore in this section referred to and affix his seal of office thereto. |
(5) The deed
referrred to in this section shall when executed and delivered be the validly
existing and enforceable obligation of the Corporation. |
5. Upon the
coming into operation of this Act the Board shall enter into an Agreement with
the Corporation whereby the Board will undertake to purchase all fresh water
produced from time to time by the Corporation and available for sale and to pay
the Corporation for the same at a rate sufficient to defray all costs, present
and future, connected with the distillation and delivery thereof, including
capital and interest charges on any plant or equipment used by the Corporation
for the production of such water. | Public Board of Works for
New Providence to purchase water. |
6. The
Corporation shall pay- | Payment of expenses. |
(a) all
reasonable expenses incurred or to be incurred in respect of the issue of the
debenture stock including all printing and engraving expenses; and |
(b) all legal
fees and costs incurred or to be incurred by the Company in connection with the
negotiation of the loan and the preparation and completion of the issue of the
debenture stock and the preparation and execution of the said mortgage and
trust deed, including all reasonable travelling expenses incurred by or on
behalf of the Company provided always that the Corporation shall not be
obligated to pay more than forty-two thousand five hundred dollars in respect
of such legal fees incurred by the Company; and |
(c) a finder's
fee of the sterling equivalent of one hundred thousand dollars to E. D. Sassoon
Banking Company, Limited, a Company also incorporated in The Bahamas, in
connection with issue and sale of the debenture stock; and |
(d) all trustee's,
co-trustee's and paying agent's fees in connection with the issue and
redemption of the debenture stock and the payment of the interest payable
thereon. |