Hawaii developer
Nauru obtains
emergency loan

It gets $2.5 million to cover shortfalls
of its sister company's airline

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By Rick Daysog
rdaysog@starbulletin.com

Air Nauru's recent financial woes are spilling over on a sister company's high-rise development in Hawaii.

Nauru Phosphate Royalties Development Inc. -- which built Nauru Tower and Hawaiki Tower in Kakaako -- recently obtained a $2.5 million, emergency loan from a partnership headed by local tourism executive Robert Iwamoto to bail out the troubled airline.

The loan -- which was made by Iwamoto's RNI Limited Partnership on June 28 -- was secured by the undeveloped portion of Nauru Phosphates' 18-acre property on Ala Moana and Piikoi Street, according to state land records.

The developer -- which last year announced plans for an additional $100 million high-rise on its Kakaako parcel -- also pledged 11 unsold luxury units in the 427-unit Hawaiki Tower condo complex.

Both Nauru Phosphate and Air Nauru are owned by the Republic of Nauru, which for years has faced dwindling resources.

Scott MacKinnon, Nauru Phosphate's attorney, said the developer plans to pay back the loan by the end of this week. He noted the loan was used to cover shortfalls at Air Nauru.

In late June, Air Nauru's sole Boeing 737 was grounded in Australia after crews refused to service the jet until they were paid for previous work and fuel, according to a news report

At the time, the Nauru government needed to raise the money "within a week" and couldn't get conventional loan approved in time, MacKinnon said. He added the loan will have no impact on Nauru Phosphate's development plans.

Roy Pfund, vice president for investments at Iwamoto's Roberts Hawaii Tours, characterized the loan as a short-term investment but declined to discuss specifics. Iwamoto could not be reached for comment.