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Exchange of Letters Constituting an Agreement between the Government of New Zealand and the Government of the Cook Islands Concerning the Variation of the Rarotongan Hotel Loans [1985] PITSE 3 (15 January 1985)

EXCHANGE OF LETTERS CONSTITUTING AN AGREEMENT BETWEEN THE GOVERNMENT OF NEW ZEALAND AND THE GOVERNMENT OF THE COOK ISLANDS CONCERNING THE VARIATION OF THE RAROTONGAN HOTEL LOANS

(Wellington and Rarotonga, 15 January and 7 February 1985)

ENTRY INTO FORCE: 7 FEBRUARY 1985

No. 1

THE HONOURABLE MR ROGER DOUGLAS
Minister of Finance of New Zealand

to

THE HONOURABLE SIR THOMAS DAVIS
Prime Minister of the Cook Islands

Office of Minister of Finance Wellington

15 January 1985

My Dear Prime Minister

I have the honour to refer discussions which have recently taken place between representatives of our respective governments concerning the variation of the terms of the agreement between our two governments, evidenced by letters of 1 April 1982 and 5 April 1982, in respect of a loan by the Government of New Zealand to the Government of the Cook Islands to enable the purchase of the hotel known as the Rarotongan Hotel and its plant and furnishing. I now propose on behalf of the Government of New Zealand that an agreement be reached between our two governments in the following terms:

(a) The Government of New Zealand shall accept in respect of the loan reduced quarterly instalments of $102,937.50 instead of $120,209.36 for a 5 year period commencing with the instalment payable on 1 October 1983 and ending with the instalment payable on 1 July 1988.

(b) The quarterly instalments in respect of the loan shall revert to the amount of $120,209.36 beginning with the instalment payable on 1 October 1988 and payment at such rate shall continue until repayment of the loan. As a result of the quarterly instalments being reduced as aforesaid there is a deferral of capital repayments on the loan.

(c) The Government of the Cook Islands shall accept that such deferred capital repayments shall be treated as a separate loan charged with interest at 10 percent per annum with quarterly rests on a cumulative basis and to be repaid in accordance with this agreement.

(d) The Government of the Cook Islands shall accept that the total amount of the deferred capital repayments is $439,926.52 which shall be repaid with interest at 10 percent per annum with quarterly payments of principal and interest of $28,220.02 commencing with a first payment on 1 October 1988 and thereafter on the 1st day of January, April, July and October in each year until repayment of the said sum of $439,926.52 has been completed.

If the foregoing provisions are acceptable to the Government of the Cook Islands, I have the honour to suggest that the present letter and your reply to that effect shall constitute an agreement between our two Governments, which shall enter into force on the date of your reply.

Yours sincerely

R. O. Douglas

No. 2

THE HONOURABLE SIR THOMAS DAVIS
Prime Minister of the Cook Islands

to

THE HONOURABLE MR ROGER DOUGLAS
Minister of Finance of New Zealand

Rarotonga

7 February 1985

My Dear Minister

I refer to your letter of 15 January 1985 concerning variation in the terms of the Agreement between the Government of New Zealand and the Government of the Cook Islands in respect of a loan to enable the purchase of the hotel known as the Rarotongan Hotel and its plant and furnishings.

The terms and conditions of variation set out in your letter are acceptable to my government. Please accept this reply as constituting my Government's agreement.

Yours sincerely

Hon. Sir Thomas Davis K B E
Prime Minister.