Gail Alexan­der

The Cen­tral Bank has re­ceived in­de­pen­dent val­u­a­tions of An­gos­tu­ra Hold­ings Ltd and CL World Brands Ltd which have been ear­marked for "trans­fer or mon­eti­sa­tion" un­der the in­sti­tu­tion's res­o­lu­tion plan for Cli­co.

This was dis­closed in the Cen­tral Bank's March 2016 progress re­port on the re­struc­tur­ing of Cli­co, British Amer­i­can (T'dad) and Cli­co In­vest­ment Bank (CIB) which was laid in Par­lia­ment last Fri­day. The re­port was ref­ered to the Pub­lic Ac­counts Com­mit­tee.

The progress re­port al­so stat­ed that the CBTT had be­gun con­sul­ta­tions with the Fi­nance Min­is­ter on the val­u­a­tion of the three com­pa­nies.

A res­o­lu­tion plan for Cli­co and BAT was first pub­lished in March 2015 by Bank. It al­so in­volves phased pay­ments to Cli­co pol­i­cy­hold­ers and cred­i­tors from the mon­eti­sa­tion of Cli­co as­sets.

A No­vem­ber 8, 2015 up­date of the plan, pub­lished on the Cen­tral Bank's web­site, in­di­cat­ed that in the first phase, the gov­ern­ment was due to re­ceive an 85 per cent pay­out of its $7 bil­lion claim on Cli­co's statu­to­ry fund.

That pay­ment com­prised $4.2 bil­lion in cash, which the gov­ern­ment re­ceived last year with the bal­ance of around $3 bil­lion to be set­tled up­on the trans­fer to gov­ern­ment of Cli­co's shares in three of Cli­co's as­sets: An­gos­tu­ra Hold­ings Lim­it­ed (AHL), CL World Brands (CLWB) and Home Con­struc­tion Lim­it­ed (HCL). Cli­co's shares in the three com­pa­nies have not been trans­ferred to the gov­ern­ment as yet.

Al­so re­ceiv­ing monies from the in­sur­ance com­pa­ny last year were some 1,700 pol­i­cy­hold­ers who held Cli­co and British Amer­i­can Short Term In­vest­ment Prod­ucts (STIPs), but opt­ed not to take up Gov­ern­ment's of­fer to be paid their mon­ey through Gov­ern­ment bonds and shares in the CLI­CO In­vest­ment Fund.

The Privy Coun­cil is due to de­liv­er judg­ment to­day on a mat­ter brought by some of those in­vestors in the STIPs, who are re­ferred to as non-as­sent­ing STIPs pol­i­cy­hold­ers.

An in­de­pen­dent val­u­a­tion of the tra­di­tion­al port­fo­lios of Cli­co and BAT has been com­plet­ed and re­ceived. The in­ter­na­tion­al firm of Oliv­er Wyman ad­vised on the sale of the tra­di­tion­al busi­ness port­fo­lios of both com­pa­nies and the sales process for Cli­co and BAT has com­menced. Stream­lin­ing of hu­man re­sources at Cli­co and BAT is al­so com­plet­ed.

Al­so in progress is an in­de­pen­dent val­u­a­tion of Home Con­struc­tion Ltd. The re­port al­so up­dat­ed the sta­tus of set­tle­ments for STIP hold­ers. See box.

CB's '15 an­nu­al re­port

laid in Par­lia­ment

Chal­lenges in 2016 will af­fect the Gov­ern­ment's rev­enues as well as the bal­ance of pay­ments and this re­quires a co-or­di­nat­ed, fo­cused ef­fort on the part of fis­cal and mon­e­tary au­thor­i­ties to ad­dress these chal­lenges, says Cen­tral Bank gov­er­nor Dr Alvin Hi­laire.

Hi­laire gave the pro­jec­tion in Cen­tral Bank's 2015 an­nu­al re­port laid in Par­lia­ment last week. He said 2016 was ex­pect­ed to be chal­leng­ing as the en­er­gy sec­tor con­tin­ues to grap­ple with nat­ur­al gas short­falls and low en­er­gy prices.

Hi­laire said the bank­ing sec­tor re­mained re­silient in 2015 de­spite the chal­lenges to the do­mes­tic econ­o­my.

"Banks re­mained well cap­i­talised and well po­si­tioned to re­spond to mar­ket shocks. The Cen­tral Bank con­tin­ued to work with the bank­ing and in­sur­ance sec­tors to strength­en their su­per­vi­so­ry and reg­u­la­to­ry frame­works,"

De­scrib­ing the glob­al econ­o­my sta­tus as "frag­ile," Hi­laire de­tailed how T&T's en­er­gy-pro­duc­ing econ­o­my re­act­ed to such va­garies, par­tic­u­lar­ly in the en­er­gy sec­tor. He said al­though the un­em­ploy­ment rate fell in the sec­ond quar­ter of 2015, the num­ber of per­sons with jobs de­clined from a year ear­li­er. As a re­sult of the sit­u­a­tion, he not­ed mod­er­ate for­eign cur­ren­cy in­flows to the do­mes­tic for­eign ex­change mar­ket

"As a re­sult, the Cen­tral Bank in­creased its for­eign ex­change sales to the mar­ket, re­sult­ing in some de­cline in in­ter­na­tion­al re­serves which nonethe­less re­mained at com­fort­able lev­els."

Set­tle­ments

�2 Those with prin­ci­pal bal­ances of less than $75,999 over the pe­ri­od March 2011 to March 2016, some $335.6 mil­lion was paid to 11,126 of the 12,020 el­i­gi­ble hold­ers. Some 7.4 per cent of STIP hold­ers have not ap­plied for the of­fer.

�2 Those with bal­ances over $75,000–some 15,042 hold­ers ac­count­ing for $11.3 bil­lion–ap­plied for the of­fer up to No­vem­ber 2014. This rep­re­sents 94.6 per cent of the to­tal STIP hold­ers (in this cat­e­go­ry).

�2 On Cli­co res­o­lu­tion plan (Phase One)–over May 1, 2015 to Feb­ru­ary 29, 2016, ap­prox­i­mate­ly $693.1 mil­lion was paid to 501 STIP hold­ers;

�2 Re­gard­ing BAT, Gov­ern­ment ad­vanced funds to BAT in Ju­ly 2015 to meet tra­di­tion­al in­sur­ance pol­i­cy­hold­er li­a­bil­i­ties in the statu­to­ry Fund, the prin­ci­pal bal­ance on­ly (with­out in­ter­est ) of non-as­sent­ing STIP hold­ers and oth­er key op­er­a­tional ex­pen­di­ture;

�2 Pro­cess­ing of ap­pli­ca­tions for BAT STIP hold­ers for the first par­tial dis­tri­b­u­tion un­der the Res­o­lu­tion Plan be­gan last Oc­to­ber. To date, 22 of the 82 pol­i­cy hold­ers have been paid un­der the first par­tial dis­tri­b­u­tion.

�2 Be­tween April and No­vem­ber 2011, some 637 ap­pli­cants who demon­strat­ed a crit­i­cal need for im­me­di­ate cash up to $250,000 were paid $128.4m.

�2 At March 2015, some $732.4m was paid to cred­it and trade unions rep­re­sent­ing 93.9 per cent of the to­tal ap­pli­cants.

�2 Arrange­ments for STIP hold­ers to covert bonds (one to 10 years and 11 to 20 years) to cash.