Jan 2015 Financial News

ON THE RIGHT: In the company’s best interest

Jan 21, 2015

THE BOARD OF DIRECTORS has approved a recommendation from management to prepare plan to re-domicile Sagicor Financial Corporation (SFC) (the non-operating holding company of the Sagicor Group), for approval by shareholders.

Re-domiciliation refers to an organisation’s relocation of its registered office from one country to another. The domicile is the legal home of a corporation.

We are re-domiciling in order to restore our credit rating; have better access to capital at better prices, have greater access to a larger pool of value-creating opportunities and have a stronger group of companies. in 2006, the Government of Barbados was rated an investment grade sovereign with a BBB+ rating, and SFC also received a rating of BBB+, which was capped by the sovereign rating of Barbados at that time. Over the years, and through the financial crisis, the credit rating of the Government of Barbados was consistently downgraded.

For some time, Sagicor has been considering whether it is strategic, from a long term perspective, to remain domiciled in a jurisdiction with the rating susceptibility that Barbados experienced. Whenever Barbados is downgraded, Sagicor is also downgraded, and the likelihood of Barbados being upgraded in the short term is somewhat remote, limiting Sagicor’s ability to access capital for future growth. According to S&P, the Sagicor rating could be upgraded if the company maintains the positive trend in its operating performance, adequate capitilisation levels commensurate with the “BBB” benchmark, completion of its plans to relocate its country of domicile to a country with at least investment grade ratings, strong regulations and adequate access to funding.

Consideration is being given to a number of locations, including, but not limited to, the United States, Luxembourg, England, Ireland and Trinidad and Tobago. A recommendation will be made only after a rigorous evaluation process is completed. We cannot presently confirm when the re-domiciliation will take place, as there are several steps involved in this process.

We have begun our investigation into the various domiciles, and are working with attorneys in the respective domiciles in order to make a recommendation.

We expect that the decision on where we are going to re-domicile will be taken early in the year. However, the process of moving will take some time, and we are hoping for completion by the end of 2015.

SFC, the holding company that would be re-domiciled, currently employs 15 individuals. The re-domiciliation will have minimal impact on SFC staff. There will be no impact on the staff of the life insurance company, Sagicor Life Inc. from re-domicilation. There should be no impact on policy premiums and/or dividends as a result of re-domicilation. However, restoration of Sagicor’s rating should allow the company to access capital at better rates, which should be accretive to policyholders and shareholders.

Sagicor will not be moving its insurance operations out of Barbados. All stakeholdes shold benefit from re-domiciliation, as it will result in an overall stronger group of companies with a stronger credit rating, better access to capital at better prices and greater access to a larger pool of value-creating opportunities.

Source:
Nation News
Wednesday January 21, 2015

http://www.nationnews.com/nationnews/news/62275/-company