Caribbean Business Round-up March 2009

By REAY GREAVES

ANTIGUA & BARBUDA

• Antigua’s Senate voted to seize R Allen Stanford’s property, setting up a possible showdown with a court-appointed receiver who was to secure the billionaire’s assets for investors in his allegedly fraudulent offshore bank scheme.  The measure was passed one day after the lower house of Parliament also voted to confiscate about 250 acres, including businesses that formed the basis of Stanford’s empire in Antigua and Barbuda.  Antiguan officials said they hoped to keep the businesses in operation and prevent the receiver from using the assets to pay investors in the Antigua-based Stanford International Bank Ltd.

•Prime Ministers Baldwin Spencer of Antigua & Barbuda and Dr. Ralph Gonsalves of St. Vincent and the Grenadines attempted to reassure the public of the soundness of Bank of Antigua Ltd (BOA) by opening, and reactivating personal chequing accounts at the bank. Dr. Gonsalves said the move was organised by PM Spencer and himself to show that members of the public could safely renew their confidence in the bank. 

BARBADOS
 
• In the face of mounting opposition criticism, Barbados Prime Minister David Thompson went on television to inform the nation that CLICO had fallen short – by several million dollars—in 2005, 2006, and 2007 in its commitment to the government’s Statutory Fund.  He outlined details of the increased deficit from 2004 right up in 2007, saying it was a situation of continued negligence for which his government could not be held responsible.

•Butterfield Bank (Barbados) Limited reported record profits on its 2008 operations. The financial statements for last year show Butterfield earning net profits of Bds$5.2 million, up by Bds$3.9 million, or 316 per cent, over 2007.

•Survey figures coming out of the National Productivity Council (NPC) showed that the level of productivity in Barbados’ manufacturing sector was in decline. According to the survey, between 2004 and 2007, the percentage change in output from the sector went from a positive of 14.4 per cent to a negative of 2 per cent.

CUBA

• Cuba and the Bahamas signed an Agreement for Bilateral Co-operation in Nassau. The accord is aimed at promoting trade and investments, technical information exchanges and joint co-operation programmes. 

•Cuba agreed to restore diplomatic relations with Costa Rica. In a statement sent by Cuba’s foreign ministry, the ministry said the Cuban government’s decision is “consistent” with its “mission of integration and unity” with the people of Latin America and the Caribbean. Relations between Cuba and Costa Rica were cut off in 1961, shortly after the Cuban Revolution.

GUYANA

• Guyana’s President Bharrat Jagdeo went public to report that Bahamas Prime Minister Hubert Ingraham had told him that there seemed to be no record in the Bahamas of Guyana having invested 53 per cent of CLICO (Guyana) assets in the Bahamas operations. However, Jagdeo said that it was the duty of the Bahamas regulators to find the money and that failure to do would result in massive fraud with those accountable facing the courts. Guyana’s Finance minister later said that he sent Prime Minister Ingraham numerous documents supporting the claim that CLICO Guyana is owed more than $35m from CLICO Bahamas.

•By late March CLICO Guyana Ltd announced plans to lay off 35 workers as the government moved to liquidate the company to recover money for insurance policyholders and pension fund contributors. Some 23 per cent of staff at CLICO Guyana are to be released in a cost-cutting move.

•President Jagdeo called for a freeze on the Cariforum/EU Economic Partnership Agreement (EPA) in light of the global economic crisis. He made the plea at a gathering of ACP Group of States and European Union (EU) parliamentarians .He said Caricom countries needed time to source funds to diversify their economies.

JAMAICA

•Standard & Poor’s Ratings Services lowered Jamaica’s long-term foreign and local currency sovereign credit ratings on Jamaica to ‘B-‘ from ‘B’, one notch down in the rating scale. The short term debt was also lowered from ‘B’ to ‘C’. However the negative outlook remained unchanged. The downgrade reflects Standard & Poor’s heightened concerns about the deteriorating economic situation and its increasing spillover into Jamaica’s fiscal and external accounts.

•Prime Minister Bruce Golding announced that Jamaica had secured commitments for almost US$1 billion from multilateral sources through to the end of March. This as his country sought to maximise the flow of foreign exchange despite the downturn in foreign currency earnings caused by the global financial crisis.

•According to a statement by the Bank of Jamaica (BOJ), the Net International Reserves (NIR) dipped 9.2 per cent to US$1.6 billion in one month, the biggest dip in five months. The NIR – seen as the country’s last resort in defending the dollar – dipped by US$163 million in the month ending February mainly because foreign assets declined by US$138 million.

•The Jamaican Government again placed on the auction block, the old cotton and polyester mill in Old Harbour, St Catherine. The Development Bank of Jamaica, which holds the asset, advertised the land, with the 212,280 square feet of buildings, for sale, inviting bids that will close on April 17.

•Alumina Partners of Jamaica (ALPART), the island’s leading bauxite plant, announced that it would be suspending all operations in Jamaica for at least one year, effective May 15.  Approximately 900 permanent employees were told by letter that their jobs would be made redundant. ALPART said the company’s alumina product had experienced a drastic 60 per cent price reversal since July 2008.
  
TRINIDAD & TOBAGO

•The US company that sold 6,000 acres of land in Florida to British American Insurance Company (BAIC), sued BAIC, a subsidiary of the beleaguered CL Financial group, with the hope of recovering US$38.2 million.  The Trinidad Guardian reported that Green Island Holdings lent British American US$56.5 million to purchase the  land, described as rural which was bought by British American for US$300 million in January 2008 with US$250 million of borrowed money.

•Close to 700 insurance agents employed by the Colonial Life Insurance Company (Trinidad) Ltd (Clico) were told not to sell any new policies until a new business model is formulated and rates have been revised.

•Trinidad Cement Ltd. recorded an eight per cent increase in revenue in 2008 over 2007at a reduced level of profit after tax of $156 million compared to $211 million the previous year.   Group CEO, Rollin Bertrand, attributed the decline largely to a net loss recorded by the group’s Barbados subsidiary, Arawak Cement Company Limited (ACCL). In his director’s statement, Rollin said the outlook for 2009 remains optimistic with strategies designed to improve capacity and increase regional market share.

•Prestige Holdings, parent company of KFC, TGI Friday’s and Long John Silver’s restaurants announced that it would not be paying dividends for the financial year 2008 but plans to resume distributions in 2009. Among the reasons cited were:  substantial  food cost inflation, labour shortages and high absenteeism. Another contributing factor was the cost incurred in leaving the Puerto Rico market where Prestige operated three TGI Friday’s restaurants.

•The National Gas Company announced the appointment of energy sector veteran Andrew McIntosh as its new president to replace outgoing president Frank Look Kin. McIntosh who has more than 31 years experience in the energy sector took up the appointment on March 9.

•In response to public anxiety, Minister in the Ministry of Finance, Mariano Browne  said the government had no plan to devalue the T&T dollar. Responding  to complaints about  a shortage of US dollars, Browne said there was an “ample supply” of foreign exchange holdings to meet demand. Central Bank Governor Ewart Williams backed up the position saying the Central Bank “stands ready to meet all foreign exchange demands from its gross reserves which now stand at around US$9 billion, the equivalent of 11 months imports.” 

•Good news from the Trinidad and Tobago Unit Trust Corporation which announced a total income of $1,439,083,000 for its 2008 financial year. This marked an increase of an estimated $3,259,110 over 2007. After subtracting expenses, finance charges, taxes and its minority interest, net income was $130,840,000.

ALSO NOTEWORTHY

•The Caribbean Tourism Organization (CTO) postponed its annual Caribbean Conference on Sustainable Tourism Development saying that the current global situation made it difficult for countries and delegates to give their full attention to the conference.

•Digicel Limited completed a US$335-million corporate bond offering, the proceeds of which is expected to acquire a 35.8 per cent stake in Digicel Holdings (Central America) Limited [DHCAL] and provide funding for general corporate purposes.

•Belize became the twelfth CARICOM member state to introduce the CARICOM passport during a ceremony held at its capital, Belmopan. The first CARICOM passport was issued on January 7, 2005.

•Japan and Venezuela agreed to a comprehensive energy co-operation pact, paving the way for Japanese enterprises such as Inpex Corporation to tap oil reserves in the Orinoco Delta area. Venezuela plans to invest $79 billion in the Orinoco Delta region to develop some of an estimated 316 billion barrels of reserves.

•The International Center for Settlement of Investment Disputes (ICSID), ruled in favour of Grenada, in the island’s dispute with an American company that claimed it was refused an oil and natural gas exploration licence because it refused to give a bribe to a former Minister. The ruling cleared the way for Grenada to take full advantage of its maritime resources, once the maritime boundary negotiations with Trinidad and Tobago are concluded.

Leave a Reply