Jan 2010 Financial News

All's well at Sagicor!

Jan 08, 2010

RUMBLINGS in Trinidad and Tobago over a decision by Sagicor Financial Corporation to sell 11.76 million new shares to the board of the National Insurance Scheme (NIS) here have caused the Barbados-based company to assure shareholders that all was well in the billion-dollar firm.

Sagicor announced in a newspaper advertisement over the weekend that it had sold the shares to the NIS for $3.32 per share. This was 18 cents below the current trading price of $3.50 per share.

The deal resulted in the NIS now owning a total of 18.95 million Sagicor shares, or 6.8 per cent of the company, and Sagicor securing $40 million from the NIS.

However, the Trinidad and Tobago Press accused Sagicor of diluting the shareholding of thousands of stockholders, most of whom were Trinidadians, and raised questions about why the company was raising capital at this time.

But Sagicor's group president and chief executive officer Dodridge Miller responded yesterday, saying that Sagicor was a "strong financial institution" that had a history of "conservative and prudent" management of its business.

He insisted that the company faced no financial difficulty.

"Sagicor is in good financial health," he said, adding that at the end of last September the 169-year-old company had US$661 million in total capital and that figure was climbing.

"Our free capital comfortably exceeds regulatory standards, as well as targets established by the board, and compared favourably with strong companies internationally," he said in a statement.

Miller said the laws of Barbados allowed directors to issue new shares through private placements and to do so without the permission of shareholders.

He admitted, however, that the move had diluted existing shareholders' shares by four per cent.

The Sagicor boss said while "there was no pressing financial issue that required us to do the private placement in December 2009", the lesson learnt from the financial crisis of 2008 was that "taking a proactive opportunity to augment capital during a period of global economic uncertainty can be a prudent business decision".

Miller said the funds raised from the deal were needed to finance further expansion.


Source:
by GERALYN EDWARD
Nation News
Friday January 8, 2010

http://www.nationnews.com/news/business/LEAD-Sagicor-responds-copy-for-web