Mar 2010 Financial News

Sale of Barbados CLICO company nears completion

Mar 26, 2010

BARBADOS' largest credit union says it's closer to sealing the deal for the purchase of CLICO Mortgage and Finance Corporation (CMFC) and if all goes according to plan, it will be keeping the doors of the company's St Lucia office open.

The Barbados Public Workers' Cooperative Credit Union Ltd (BPWCCUL) had already obtained permission from the Registrar of Cooperatives -- the regulator for the credit union movement in the island -- to go ahead with the acquisition from current owners, CLICO Holdings Barbados Ltd.

The credit union announced yesterday that it recently received approval from the Central Bank of Barbados to proceed with the purchase.

"This latest development means that BPWCCUL has obtained key regulatory approvals and within months, the credit union expects to conclude the deal. An important final step will include obtaining permission from the Eastern Caribbean Central Bank, which has regulatory oversight for CMFC's branch in Castries," the BPWCCUL statement said. "This permission would allow the company to maintain its presence in Castries."

BPWCCUL Chief Executive Officer Clorinda Alleyne confirmed that the credit union, which has assets of over BDS$650 million (US$325 million), had already made the traditional own down payment to confirm their commitment to purchasing CMFC.

CMFC has assets of BDS$144 million (US$72 million) and an employee role of 20, including three located in St Lucia. A key component of the BPWCCUL bid for CMFC is a commitment to maintaining all existing jobs.

CMFC is one of three CLICO Holdings Barbados Ltd subsidiaries which were put up for sale under the watch of an Oversight Committee. The sale negotiations for one of the others -- Clico General -- is expected to be completed soon with local insurance company CGI Ltd making a bid.

However, Prime Minister David Thompson indicated that it had been more challenging to sell the other company, Clico International Life, because of the large number of Executive Flexible Premium Annuities, which carry high interest rates and are short-term deposits. He said potential bidders have expressed their concern about this liability, which is in excess of BDS$300 million (US$150 million) and most of which matures in 2012.

Clico International Life has also been barred from writing new business until it can meet its Statutory Fund obligations. However, the company has appealed that decision.


Source:
Jamaica Observer
Friday, March 26, 2010

http://www.jamaicaobserver.com/business/Clico-sale_7505160