Oil & Gas seeks $40 million bailout but prez is barrier
WINDOW ROCK
So far officials for the Navajo Nation Oil and Gas Company have had no problem getting support for their request of up to a $40 million bailout to prevent the banks from taking over the company’s assets. But their efforts will soon hit an immovable object – the president of the Navajo Nation, Russell Begaye.
Oil and Gas officials want the tribe to take up to $40 million out of the Master Trust Fund’s investment program and invest it in their company so that it won’t default on its loans. Officials also say the funds are necessary to branch out to increase revenue so that the company won’t find itself in this situation again.
In a presentation before the Navajo Nation’s Budget and Finance Committee recently, company officials argued that this would not mean less money to the tribe because the tribal investment fund would get preferred stock in the company. So instead of the $40 million benefitting the banks and third party interests, the company said by investing in Oil and Gas the tribe would get back the same historic return on its money through stock dividends and increased royalties and taxes.
One important thing to remember is that the $74.1 million that the company owes to nine banks has not been guaranteed by the Navajo Nation. So if the company defaults, the banks will simply take over the company’s assets. On the other hand, the tribe has historically received a lot of money from the company so it is in its the best interest to keep the cash flowing, according to information provided to the budget committee.
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