Nathan VanderKlippe
Northern News Services

Rankin Inlet (July 10/02) - The board and management of Sakku Investments Corp. are promising a fresh new start after refusing $1.1 million in unneeded loan money.

Last September, Nunavut Tunngavik Incorporated promised the corporation $2.2 million in loan assistance to bail it out of a deep debt burden. That money was to be split over two years, but thanks to higher-than-expected profits and low interest rates on debt repayment, the corporation was able to turn down the second instalment.

"We've climbed completely out of debt and are in a strong cash position," said Sakku president and CEO Paul Landry.

Sakku, the investment arm of the Kivalliq Inuit Association, is beginning to breathe more steadily after years with its head below the water.

Formed in 1989, the corporation began investing in earnest in 1996. But debts soon began to escalate. Landry said "some bad investments and some frivolous spending" meant Sakku was without money to get out of the red.

"The previous administration just overextended themselves. They spent more money than they brought in and that just left us with one hell of a hole," he said.

In 2000, the company announced another fresh start, promising it would operate more like a successful corporation. Part of that included hiring a full-time president, separating the roles of board chair and corporation CEO.

By 2001, the corporation was over $2 million in debt. With a dismal credit rating, it had no way of bringing in funds to refinance. That's when NTI stepped in, offering the $2.2 million in aid.

Despite turning down $1.1 million of that money, the company is still over $5 million in debt -- it owes over a million to NTI, and has about $4 million in other long-term debt. The investment company has a financial base of about $10 million.

Sakku intends to pay off the NTI loan by December 2004.

No guarantees

The corporation has also elected a new board of directors, including Peter Tatty who was reappointed board chair, Simon Enuapik, Jimmy Misheralak and Ben Ell. Landry said the new board is more business-oriented.

"Some of these people are in business themselves and are more accustomed with dealing with business decisions rather than social decisions," he said.

Tatty said increased financial stability is allowing Sakku to expand its staff to nine from two, which it had in 2000.

The company is also eyeing another half-dozen acquisitions, although it is remaining tight-lipped about details.

Landry said he is "more than cautiously optimistic" about a third year in the black for Sakku.

However, he said, there is no assurance that this restructuring will spell the end for the corporation's financial woes.

"Like anything else, there's nothing you can say to guarantee it.

Certainly during my time and the time of the board, we would not make any decisions that would allow us to slip backwards. But you know the old saying, never say never," he said.