Issue Guidelines To Protect Customers Interest in Debentures Scheme
By: Bill K. Jarkloh
Photo: CBL Governor Dr. Mill Jones
By: Bill K. Jarkloh
Photo: CBL Governor Dr. Mill Jones
Weblog: www.theperiscope.com/www.panwhanpen.com
Email: bill_ksolborjarkloh@yahoo.com
Call: (231)-77-544-286/(231)-6-468-244
As the Management of the Central Bank of Liberia in collaboration with CELLCOM GSM service provider moves to protect the interest of Convertible Debentures, the GSM company says regulatory agencies of government such as the Central Bank should also address Concerns about the need for developing and regulating underdeveloped sectors and complementing factors of growing economy.
Commenting at a joint Central Bank of Liberia and CELLCOM press briefing Monday, CELLCOM’s Board Chairman, Mr. Zaidenberg noted the company’s gratitude to Governor Jones and officials of the Central Bank of Liberia for the opportunity during the course of what he called “meaningful engagements to explore what is really unchartered financial territory in Liberia.”
Although the Offering of Convertible Debentures is new to Liberia, Mr. Zaidenberg said the CBL-CELLCOM engagements have afforded the company the chance to act positively and progressively together to consider the evolving possibilities of its growing economy, enhance the public trust and confidence and to develop appropriate mechanisms to embrace what is a certain future in the conduct of business in Liberia.
The CELLCOM Board Chairman, saying that regulatory institutions such as the CBL exercising authority without fear or favor will not only provide assurance for collective quests for increased integrity, orderliness and safeguard of public trust but also address Concerns about the need for developing and regulating underdeveloped sectors and complementing factors of growing economy.
“At CELLCOM, we believe in our individual and collective capacities to be better. This is why we are Liberia’s fastest growing business. All the CELLCOM has tried to do in Liberia affirm our belief that this country and its economy will improve, if we – the business community and regulating agencies do our parts well,” Mr. Zaidenberg recounted,
He added that this requires that members of the business community’s’ respects local laws, conform to international best practices and conduct business and responsibilities with the highest standard of transparency and integrity.
Accordingly, the Central Bank of Liberia yesterday Monday new measures which the management of the GSM Company says it is committed to upholding in its debenture scheme.
On November 8, CELLCOM Telecommunications Incorporated, a leading GSM telephony and internet services provider announced an Offering of Convertible Debentures to the Liberian public.
In its Offering, the GSM service providers advertised interest payment of a minimum of 10% per annum, a tenor of five years for its convertible Debentures and, at the election of each Debenture holder, either the conversion of the face value of the Debenture certificate into shares of common stock or the repayment of the principal invested plus any accrued interests.
CELLCOM offer comes at a time when the capital market in Liberia has yet to be developed, including having in place the appropriate regulatory and supervisory regime, according to the CBL authorities.
The Central Bank’s Executive Governor, Dr. Mills Jones told a news briefing that the development of a capital market in Liberia has been an interest of the Central Bank of Liberia.
According to the bank governor, the CBL has recently announced the need for avoiding any actions on the part of businesses that have the potential of creating problems that could lead to a loss of confidence of the public in the issuance of shares and/or debt obligations ahead of the establishment of a well functioning capital market.
CELLCOM’s Commitments
“In line with its mandate to ensure the orderly development of financial and capital markets that are responsive to the needs of the national economy, and to safeguard the public trust and interest in relation to financial transactions, the Central Bank of Liberia invited CELLCOM to review and discuss its Offering of the said Convertible Debentures,” Governor Jones indicated.
He told journalists, “Based on these discussions, CELLCOM has committed to make changes intended to enhance the disclosure of information about the company and the nature of the debenture being offered with a view to safeguarding the interest and trust of the public and ensuring orderliness in the process of issuing such financial instruments.
Accordingly, he said CELLCOM has committed to make several changes in the execution of its scheme, with immediate effect, which include the title of the Investment Guide of CELLCOM Offering of Convertible Debenture will be changed from “Private Placement of up to 500,000 Convertible Debentures at US$10 Per Unit Payable in Full Upon Application” to read “Placement of up to 500,000 Convertible Debentures at US$10 Per Unit Payable in Full Upon Application”. The removal of the word “Private” obligates CELLCOM to augment the level of disclosure to the public.
“In this connection,” Dr. Jones continued, the disclaimer of CELLCOM in reserving the “…right to amend or replace the information at any time and undertakes no obligation to provide the recipient with access to any additional information…” has been changed.
The Governor further announcing that CELLCOM has committed to now communicate any changes or replacement of information – with appropriate rationale for changes - by communicating, in a reasonable time, through publications in newspapers of general circulation, radio and/or other media, noted that in the summary of the terms of the Offering, CELLCOM will amend its statement to reflect that “this offer is intended, in part, to enable Liberians to eventually participate in the ownership, control and management of the company”.
According to the CBL Governor, this should make it clearer to the public that the purchase of these Debentures does not automatically translate into one becoming a ‘part-owner’ of CELLCOM.
“It is only at the maturity of the Debenture (5 yrs from now) that an investor may exercise the option of having his or her Debentures converted into shares. This clarification will also be further emphasized in succeeding advertisements and related media campaigns undertaken by CELLCOM,” he added.
Flanked by CELLCOM Board Chairman Mr. Avi Zaidenberg, Dr. Jones maintained that the GSA Company has committed to further clarify that for those investors who want to be paid in full at the maturity date, CELLCOM will pay back the Debentures in full on the maturity date, the issue price plus any unpaid accrued interest. For those investors who wish to become shareholders, Cellcom will convert the principal of its Debentures into shares of common stock.
“Not later than 30 days prior to the maturity date of the Debentures, CELLCOM will inform Debenture holders of the impending maturity date and that investors would be reminded of their right to either redeem the Debentures or convert same to shares in Cellcom,” he said.
Debentures holders must be informed
He noted, ”This information will be communicated to Debenture holders by written notices to the addresses provided on the subscription forms; notices placed in at least two local newspapers; notices published on two internet websites including CELLCOM’s; notices broadcast on at least three radio stations and sent via SMS text messages for a period of two weeks.
Dr. Jones asserted that the prior offering of CELLCOM allowed for the automatic conversion of Debentures into shares, in the event that an investor was unavailable to express his or her desire to either redeem the Debenture or to convert it into shares within 1 month following its maturity.
But he noted that as a further protection to the public, in the event that Cellcom does not receive a response from the Debenture holder within one month as of the maturity date of the Debenture, Cellcom will hold the principal of the Debenture plus any unpaid accrued interest for a further period of one year within which the Debenture holder can still exercise his or her right to either liquidate said Debenture or have it converted into shares, provided however that no further interest shall accrue on the principal amount, as of the maturity date.
“At the expiry of the one year period, Cellcom will remit to the Central Bank of Liberia any unclaimed or unconverted principal amounts, plus unpaid interest earned prior to the maturity date. The CBL will hold the funds in escrow, for up to 15 years, on behalf of debenture holders, their heirs, and assignee,” the CBL boss explained.
Given that Liberia has yet to develop a fully functional capital market that would allow for regular buying and selling of securities, such as debentures, he said CELLCOM has agreed to facilitate the transfer process (including registration) for debenture holders wishing to sell or transfer ownership of their debenture prior to maturity.
CELLCOM, he furthered, will not be involved in the transaction that takes place between the debenture holder and the third party, including any discounts that may be agreed upon between the two parties. “For the service of facilitating the transfer process, CELLCOM will charge an administrative fee in respect to each trade of said Debentures, provided said administrative charge will not exceed 2% of the face value of the Debenture,” he added.
The Central Bank Executive Governor accentuated that Cellcom commits to the provision of this service after August 30, 2010. “In effect, this provision makes it easier for holders of the debentures to be able to convert the debenture to cash through agreed upon transactions with third parties ahead of the five year maturity period,” he told the journalists.
Recent issuances of securities have pointed to an emerging need for an expanded range of options to mobilize domestic and international savings for efficient allocation to productive economic activities. This is why an orderly process for developing Liberia’s capital market is essential.
Meanwhile, the CELLCOM Board Chairman said he is the GSM company is pleased with and grateful to the public for its response to its offering of Convertible Debentures, saying that the CELLCOM has extended its purchase of convertible debentures to April 15, 2010.
Email: bill_ksolborjarkloh@yahoo.com
Call: (231)-77-544-286/(231)-6-468-244
As the Management of the Central Bank of Liberia in collaboration with CELLCOM GSM service provider moves to protect the interest of Convertible Debentures, the GSM company says regulatory agencies of government such as the Central Bank should also address Concerns about the need for developing and regulating underdeveloped sectors and complementing factors of growing economy.
Commenting at a joint Central Bank of Liberia and CELLCOM press briefing Monday, CELLCOM’s Board Chairman, Mr. Zaidenberg noted the company’s gratitude to Governor Jones and officials of the Central Bank of Liberia for the opportunity during the course of what he called “meaningful engagements to explore what is really unchartered financial territory in Liberia.”
Although the Offering of Convertible Debentures is new to Liberia, Mr. Zaidenberg said the CBL-CELLCOM engagements have afforded the company the chance to act positively and progressively together to consider the evolving possibilities of its growing economy, enhance the public trust and confidence and to develop appropriate mechanisms to embrace what is a certain future in the conduct of business in Liberia.
The CELLCOM Board Chairman, saying that regulatory institutions such as the CBL exercising authority without fear or favor will not only provide assurance for collective quests for increased integrity, orderliness and safeguard of public trust but also address Concerns about the need for developing and regulating underdeveloped sectors and complementing factors of growing economy.
“At CELLCOM, we believe in our individual and collective capacities to be better. This is why we are Liberia’s fastest growing business. All the CELLCOM has tried to do in Liberia affirm our belief that this country and its economy will improve, if we – the business community and regulating agencies do our parts well,” Mr. Zaidenberg recounted,
He added that this requires that members of the business community’s’ respects local laws, conform to international best practices and conduct business and responsibilities with the highest standard of transparency and integrity.
Accordingly, the Central Bank of Liberia yesterday Monday new measures which the management of the GSM Company says it is committed to upholding in its debenture scheme.
On November 8, CELLCOM Telecommunications Incorporated, a leading GSM telephony and internet services provider announced an Offering of Convertible Debentures to the Liberian public.
In its Offering, the GSM service providers advertised interest payment of a minimum of 10% per annum, a tenor of five years for its convertible Debentures and, at the election of each Debenture holder, either the conversion of the face value of the Debenture certificate into shares of common stock or the repayment of the principal invested plus any accrued interests.
CELLCOM offer comes at a time when the capital market in Liberia has yet to be developed, including having in place the appropriate regulatory and supervisory regime, according to the CBL authorities.
The Central Bank’s Executive Governor, Dr. Mills Jones told a news briefing that the development of a capital market in Liberia has been an interest of the Central Bank of Liberia.
According to the bank governor, the CBL has recently announced the need for avoiding any actions on the part of businesses that have the potential of creating problems that could lead to a loss of confidence of the public in the issuance of shares and/or debt obligations ahead of the establishment of a well functioning capital market.
CELLCOM’s Commitments
“In line with its mandate to ensure the orderly development of financial and capital markets that are responsive to the needs of the national economy, and to safeguard the public trust and interest in relation to financial transactions, the Central Bank of Liberia invited CELLCOM to review and discuss its Offering of the said Convertible Debentures,” Governor Jones indicated.
He told journalists, “Based on these discussions, CELLCOM has committed to make changes intended to enhance the disclosure of information about the company and the nature of the debenture being offered with a view to safeguarding the interest and trust of the public and ensuring orderliness in the process of issuing such financial instruments.
Accordingly, he said CELLCOM has committed to make several changes in the execution of its scheme, with immediate effect, which include the title of the Investment Guide of CELLCOM Offering of Convertible Debenture will be changed from “Private Placement of up to 500,000 Convertible Debentures at US$10 Per Unit Payable in Full Upon Application” to read “Placement of up to 500,000 Convertible Debentures at US$10 Per Unit Payable in Full Upon Application”. The removal of the word “Private” obligates CELLCOM to augment the level of disclosure to the public.
“In this connection,” Dr. Jones continued, the disclaimer of CELLCOM in reserving the “…right to amend or replace the information at any time and undertakes no obligation to provide the recipient with access to any additional information…” has been changed.
The Governor further announcing that CELLCOM has committed to now communicate any changes or replacement of information – with appropriate rationale for changes - by communicating, in a reasonable time, through publications in newspapers of general circulation, radio and/or other media, noted that in the summary of the terms of the Offering, CELLCOM will amend its statement to reflect that “this offer is intended, in part, to enable Liberians to eventually participate in the ownership, control and management of the company”.
According to the CBL Governor, this should make it clearer to the public that the purchase of these Debentures does not automatically translate into one becoming a ‘part-owner’ of CELLCOM.
“It is only at the maturity of the Debenture (5 yrs from now) that an investor may exercise the option of having his or her Debentures converted into shares. This clarification will also be further emphasized in succeeding advertisements and related media campaigns undertaken by CELLCOM,” he added.
Flanked by CELLCOM Board Chairman Mr. Avi Zaidenberg, Dr. Jones maintained that the GSA Company has committed to further clarify that for those investors who want to be paid in full at the maturity date, CELLCOM will pay back the Debentures in full on the maturity date, the issue price plus any unpaid accrued interest. For those investors who wish to become shareholders, Cellcom will convert the principal of its Debentures into shares of common stock.
“Not later than 30 days prior to the maturity date of the Debentures, CELLCOM will inform Debenture holders of the impending maturity date and that investors would be reminded of their right to either redeem the Debentures or convert same to shares in Cellcom,” he said.
Debentures holders must be informed
He noted, ”This information will be communicated to Debenture holders by written notices to the addresses provided on the subscription forms; notices placed in at least two local newspapers; notices published on two internet websites including CELLCOM’s; notices broadcast on at least three radio stations and sent via SMS text messages for a period of two weeks.
Dr. Jones asserted that the prior offering of CELLCOM allowed for the automatic conversion of Debentures into shares, in the event that an investor was unavailable to express his or her desire to either redeem the Debenture or to convert it into shares within 1 month following its maturity.
But he noted that as a further protection to the public, in the event that Cellcom does not receive a response from the Debenture holder within one month as of the maturity date of the Debenture, Cellcom will hold the principal of the Debenture plus any unpaid accrued interest for a further period of one year within which the Debenture holder can still exercise his or her right to either liquidate said Debenture or have it converted into shares, provided however that no further interest shall accrue on the principal amount, as of the maturity date.
“At the expiry of the one year period, Cellcom will remit to the Central Bank of Liberia any unclaimed or unconverted principal amounts, plus unpaid interest earned prior to the maturity date. The CBL will hold the funds in escrow, for up to 15 years, on behalf of debenture holders, their heirs, and assignee,” the CBL boss explained.
Given that Liberia has yet to develop a fully functional capital market that would allow for regular buying and selling of securities, such as debentures, he said CELLCOM has agreed to facilitate the transfer process (including registration) for debenture holders wishing to sell or transfer ownership of their debenture prior to maturity.
CELLCOM, he furthered, will not be involved in the transaction that takes place between the debenture holder and the third party, including any discounts that may be agreed upon between the two parties. “For the service of facilitating the transfer process, CELLCOM will charge an administrative fee in respect to each trade of said Debentures, provided said administrative charge will not exceed 2% of the face value of the Debenture,” he added.
The Central Bank Executive Governor accentuated that Cellcom commits to the provision of this service after August 30, 2010. “In effect, this provision makes it easier for holders of the debentures to be able to convert the debenture to cash through agreed upon transactions with third parties ahead of the five year maturity period,” he told the journalists.
Recent issuances of securities have pointed to an emerging need for an expanded range of options to mobilize domestic and international savings for efficient allocation to productive economic activities. This is why an orderly process for developing Liberia’s capital market is essential.
Meanwhile, the CELLCOM Board Chairman said he is the GSM company is pleased with and grateful to the public for its response to its offering of Convertible Debentures, saying that the CELLCOM has extended its purchase of convertible debentures to April 15, 2010.
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