Jun 2018 Financial News

NIF a gift to the country

Jun 26, 2018

GOVERNMENT’s highly anticipated Initial Public Offering (IPO) for its National Investment Fund (NIF), through a company formed to monetise some assets recovered from the CLICO bail out, will run from July 11 to August 8.

The announcement was made by Finance Minister Colm Imbert yesterday in Parliament.

The prospectus as a gift to keep on giving to the people of Trinidad and Tobago, from whom $23 billion in tax dollars was injected into the collapsed  conglomerate.

The NIF will be founded with an assortment of shares pulled from various former portfolios of CLICO, with the majority coming from Republic Bank valued at $4.3 billion and representing 55 per cent of the Fund

Government will also assign $200 million in One Caribbean Media (OCM) shares to represent two per cent of the company, $970 million from Angostura Holdings Ltd for 12 per cent of the Fund’s shares, Trinidad Generation Unlimited (TGU) at $2.025 billion with 26 per cent of shares and the West Indian Tobacco Company (WITCO) with $405 million at five per cent of the Fund’s shares.

Imbert, speaking during debate on The Corporation Tax (Amendment) Bill, said these starting assets may be swapped for others that become available as time goes by.

The Finance Minister also expressed frustration with the Opposition’s criticisms of the new State company, which will be publicly listed and founded from a consortium of former CLICO assets worth some $8 billion, saying the project was transparent and heavily researched.

The minister said intense market research went into the formation of the fund and launch of IPO, through which Government hopes to net some $4 billion from private and public investment.

The market value of the shares will be available through the TT Stock Exchange (TTSE), was determined by independent analysts.

The debate yesterday sought to make certain amendments to encourage the highest growth and returns the fund could offer and included a proposal to exempt its proits and payable bonds from corporation tax.

Saying the repayment of CLICO’s debt was critical to the local economy, Imbert added that the point of the Fund in this form was to facilitate the participation of the widest possible cross section of citizens.

The Government will include to draw citizen investment and ensure that the public understands what it available to it.

Imbert said the Government felt the fund was well-backed and secure, given that its investment amounted to $8 billion but bonds would be payable only up to $4 billion.

Government will also receive a promissory note of $7.92 billion, of which $3.92 billion will be converted into ordinary shares and held on to, and the residual $4 billion into repaying the Government.

The investment would provide regular interest through tax benefits, dividends and provide immediate liquidity for investors through the Stock Exchange.

During the first five year tranche, interest will be set at 4.5 per cent, for the second tranche of 12 years it will be set at 5.7 per cent and for the third and 20 year tranche, at 6.6 per cent.

Imbert said the Government expects $1.2 billion from tranche one, $1.6 billion from tranche two and $1.2 billion for tranche three.

Annual yield is estimated around $400 million and each year, part will be used to pay interest on bonds and the balance will go into a fund for the payment of bonds at the end of their tenure.

Imbert said he hoped yester day’s presentation dispelled any speculation that Government in- tended to dissipate the assets of CLICO to friends.
 

Source:
The Trinidad Express
Tuesday June 26 2018