CL Financial chairman Lawrence Duprey said yesterday that CL Financial will buy back from the Government one of the group’s major assets, Pt Lisas-based Methanol Holdings Ltd, after agreeing to hand over ownership of the company to the Government under the terms of a memorandum of understanding (MOU) for a costly bailout of the CL Financial Group.

The MOU, signed after a week of negotiations between CL Financial and the Government, specifies that in return for Government’s assistance, the State will take ownership of the company and its Pt Lisas plant. However, following yesterday’s press conference at the Central Bank, Duprey told the T&T Guardian that CL Financial would buy back the company because he had German partners in the venture.

Central Bank governor Ewart Williams said yesterday that the troubles at Clico and CL Financial were precipitated by a liquidity crisis at Clico Investment Bank (CIB) and concerns about the ability of Clico and British American to meet their obligations to policy-holders. He said this had come about because depositors had become concerned about the precipitous decline in methanol prices and had lost confidence in CIB. As a result, there had been a rush to reclaim their money from the bank.

Pt Lisas-based Methanol Holdings Ltd was shut down last year for maintenance amidst the collapse of the methanol market. However, Duprey said yesterday the plant, as well as the group’s ammonia plant, was back in operation. He said methanol and ammonia prices were at near normal levels. Duprey, who was present at the press conference, said that for the past week, depositors of CIB had been pressing the bank to recover their deposits. “People are getting jumpy...And as they get jumpy, they were withdrawing,” Duprey told the Guardian.

He was unable to say how much CIB had repaid its depositors, but he said that because of the potential for a run on CIB, he had approached the Central Bank to take early action to protect the company. Duprey said, “In financial crises, the most important thing is early action and understanding the scope of the problem.” Williams added that the decline in real estate prices had also hurt CL Financial, which owns extensive real estate holdings. Both Williams and Finance Minister Karen Nunez-Tesheira said it was Duprey who had approached the Government for help after CL Financial realised that it was in difficulty.