Jun 2016 Financial News

Sagicor board wants to relocate from Barbados

Jun 07, 2016

Regional financial services company Sagicor yesterday confirmed that the board and management of the company is recommending that it be redomiciled from Barbados to Bermuda.

The decision to redomicile requires the approval of 66.66 per cent of the company’s shareholders, voting at a special meeting in Barbados tomorrow.

Sagicor, which has been a Barbadian company for more than 175 years, decided in January 2015 to change its domicile because its credit rating had been affected by a series of downgrades of Barbados between 2009 and 2014.

The company decided in January 2015 to seek a domicile in an investment-grade country, as it would be less costly to raise capital by issuing bonds.

In August 2015, Sagicor raised US$320 million through a sevenyear, fixed-rate bond at an interest rate of 8.875 per cent. Part of the proceeds of that bond were meant to refinance a bond that was issued at 7.5 per cent in 2006, when Barbados was still an investment grade country.

Sagicor executive, Ravi Rambarran, speaking at a news conference, defended the company refinancing a bond at a higher interest rate.

He dismissed a comparison with a TCL bond, which was issued last year at 6.5 per cent, saying Sagicor is paying 8.875 per cent a year because its bond is unsecured, issued at a fixed rate and can be called after four years.

Asked when next did Sagicor intend to raise new capital, Rambarran said the company was always considering that issue but he could not give a definitive answer.

T&T was also considered as the Sagicor domicile but was not chosen because its corporate environment would have made it difficult to facilitate the move, Rambarran said.

The fact that Moody’s downgraded T&T earlier this year would have weighed on the Sagicor decision. Over 51 per cent of Sagicor’s ordinary shares are held by shareholders who reside in T&T.

Sagicor will continue to be treated as tax resident in Barbados.

Source:
Trinidad Guardian, A5
Tuesday June 7, 2016