In re­spond­ing to a mo­tion on the ad­journ­ment in the Sen­ate on Tues­day, Min­is­ter in the Min­istry of Fi­nance, Bri­an Man­ning, said the Gov­ern­ment is plan­ning to in­tro­duce a Se­ries D of bonds is­sued by the Na­tion­al In­vest­ment Fund Hold­ing Com­pa­ny (NIF), which would be con­sid­ered NIF2.

Mr Man­ning re­mind­ed the Sen­ate that the first tranche (Se­ries A) of the NIF bonds is due to ma­ture on Au­gust 9, 2023, and that the Min­istry of Fi­nance is cur­rent­ly fo­cussed on en­sur­ing that suf­fi­cient funds are avail­able to pay the hold­ers of first tranche $1.2 bil­lion. NIF was is­sued in three tranch­es in Au­gust 2018.

"Af­ter this, NIF will launch a Se­ries D bond, us­ing ap­pro­pri­ate State as­sets, which can be con­sid­ered to be a NIF2 is­sue. The terms of the Se­ries D NIF bonds will be sim­i­lar to the orig­i­nal NIF bonds, ap­pro­pri­ate­ly ad­just­ed for cur­rent mar­ket con­di­tions."

Read­ers should take care­ful note of the fact that Mr Man­ning said NIF2 will be launched af­ter Au­gust 9, "us­ing ap­pro­pri­ate State as­sets."

The is­sue that Mr Man­ning did not an­swer was whether NIF2 would in­clude Cli­co's shares in Methanol Hold­ings In­ter­na­tion­al Ltd (MHIL), a hold­ing com­pa­ny for the Oman-based methanol pro­duc­er that the in­sur­ance com­pa­ny owns in part­ner­ship with Switzer­land-based petro­chem­i­cal gi­ant, Pro­man.

NIF was in the news last week Tues­day as a re­sult of re­sponse giv­en by Mr Man­ning to an­oth­er mo­tion on the ad­journ­ment by Sen­a­tor Mark.

At that sit­ting last week, Mr Man­ning dis­closed that on Feb­ru­ary 21, 2023, NIF ac­cept­ed an of­fer from Cli­co to ac­quire 17 per cent of its shares in MHIL.

He al­so dis­closed that on Jan­u­ary 9, 2023, Gov­ern­ment ac­cept­ed an of­fer from Cli­co to ac­quire 19.63 per cent of its MHIL shares "as part of the re­duc­tion of the debt owed to the Gov­ern­ment of the Re­pub­lic of Trinidad and To­ba­go (GORTT)."

Mr Man­ning re­vealed, as well, that Cli­co was look­ing to dis­pose of 36.63 per cent of its shares in MHIL to con­form with the 2018 In­sur­ance Act, which stip­u­lates that in­sur­ance com­pa­nies in T&T should not hold more than 20 per cent of any en­ti­ty. Cli­co's in­ten­tion, there­fore, is to sell 36.63 per cent of its shares in MHIL and re­tain 19.90 per cent of the methanol pro­duc­er.

In his pre­sen­ta­tion to the Sen­ate on April 25, 2023, the Min­is­ter in the Min­istry of Fi­nance, al­so dis­closed that Cli­co had en­tered in­to a joint share val­u­a­tion agree­ment on No­vem­ber 1, 2021, with a com­pa­ny called Con­sol­i­dat­ed En­er­gy Ltd (CEL), which is the in­vest­ment hold­ing ve­hi­cle for the shares held by Pro­man in MHIL.

The pur­pose of the joint share val­u­a­tion agree­ment was to con­duct an in­de­pen­dent val­u­a­tion of the MHIL shares, joint­ly owned by Cli­co and Pro­man.

"It was agreed that Cli­co's of­fer for sale of MHIL shares will be a max­i­mum of 36.63 per cent and a min­i­mum of 16 per cent and that any of­fered shares not tak­en up by CEL would be of­fered to GORTT for debt re­duc­tion and any re­main­ing shares there­after would be of­fered to a non-com­pet­i­tive third par­ty," said Mr Man­ning.

He added that Cli­co of­fered its 36.63 per cent block of MHIL shares to CEL by let­ter dat­ed No­vem­ber 2, 2022, in ac­cor­dance with the joint share-val­u­a­tion agree­ment and the in­de­pen­dent val­u­a­tion re­port.

"CEL re­spond­ed to Cli­co's of­fer with coun­terof­fers as to quan­ti­ties, price and con­di­tions that were all out­side of the share-val­u­a­tion agree­ment and the of­fer made to them. Hence, CEL's re­sponse was deemed by Cli­co to be a re­jec­tion of its of­fer," and Cli­co then pro­ceed­ed to of­fer the shares to the Gov­ern­ment and NIF as per the joint share val­u­a­tion agree­ment.

Mr Man­ning al­so said: "To date, Cli­co has signed share-ac­qui­si­tion agree­ments and share trans­fer forms with the Gov­ern­ment of the Re­pub­lic of Trinidad and To­ba­go and NIF, but the share reg­is­ter of MHIL has not yet been amend­ed to re­flect the trans­fers."

Claire Gomez-Miller, the ex­ec­u­tive chair of Cli­co, said the fol­low­ing in re­sponse to ques­tions from me last Thurs­day:

"All GORTT and NIF agree­ments and doc­u­ments have been signed and sent to MHIL for ex­e­cu­tion.

"The trans­ac­tion can on­ly be com­plet­ed when the MHIL share reg­is­ter shows the ti­tle has been legal­ly changed from Cli­co to GORTT and NIF.

"NIF can­not recog­nise the ac­qui­si­tion in their fi­nan­cials un­til they have ti­tle to the shares."

Ms Gomez-Miller state­ment in­di­cates that the trans­fer of the shares to the Gov­ern­ment and NIF has NOT been com­plet­ed and will on­ly be com­plet­ed when the MHIL share reg­is­ter shows the ti­tle has been legal­ly changed from Cli­co to GORTT and NIF

Sev­er­al is­sues arise from the dis­clo­sure of the facts, so far, on the is­sue of NIF and NIF2 by Bri­an Man­ning and Claire Gomez-Miller:

1) What is the rea­son the MHIL share reg­is­ter was not amend­ed, as at April 25, 2023, even though Cli­co had signed the share-ac­qui­si­tion agree­ments and share trans­fer forms for the Gov­ern­ment and NIF in Jan­u­ary and Feb­ru­ary 2023?

My own sus­pi­cion–for the two-month de­lay in amend­ing the MHIL share reg­is­ter to re­flect the trans­fer of shares to the Gov­ern­ment and NIF–is that there is a dis­pute be­tween Cli­co and Pro­man in­volv­ing lawyers and the in­ter­pre­ta­tion of the joint share-ac­qui­si­tion agree­ment.

From what I can de­duce from Mr Man­ning's April 25 re­sponse, the dis­pute could sur­round the fol­low­ing is­sues:

* Were CEL's coun­terof­fers as to quan­ti­ties, price and con­di­tions part of the ne­go­ti­at­ing process or did the coun­terof­fers fall "out­side of the joint share-val­u­a­tion agree­ment and the of­fer made to them," as Mr Man­ning stat­ed?

In oth­er words, does a coun­terof­fer, in and of it­self, rep­re­sent a re­jec­tion of the orig­i­nal of­fer?

* Is the NIF a true third par­ty of the Gov­ern­ment?

It is use­ful to note that NIF is 100 per cent owned by the Gov­ern­ment, its of­fice is in the Min­istry of Fi­nance build­ing on In­de­pen­dence Square and all five of its di­rec­tors are em­ploy­ees of the Min­istry of Fi­nance: Jen­nifer Lutch­man is the deputy per­ma­nent sec­re­tary; Nadi­ra Ly­der is the co­or­di­na­tor of PPPs; Dex­ter Jag­ger­nauth is pro­gramme man­ag­er at the Strate­gic Man­age­ment and Ex­e­cu­tion Of­fice; Hay­den Man­zano is ex­ec­u­tive di­rec­tor of the In­vest­ments Di­vi­sion and Cindy Pierre is state coun­sel II in the Of­fice of the Trea­sury So­lic­i­tor.

2) If the joint share-val­u­a­tion agree­ment stat­ed that any shares of­fered to, but not tak­en up by, CEL, would be of­fered to the Gov­ern­ment for debt re­duc­tion, why didn't the Gov­ern­ment alone ac­cept the of­fer from Cli­co, there­by elim­i­nat­ing the in­sur­ance com­pa­ny's debt to it, and then dis­trib­ute shares to NIF af­ter­wards?

I want to end by say­ing that I agree 1000 per cent with a state­ment made by Min­is­ter of Fi­nance, Colm Im­bert in the 2020 bud­get that "NIF is a sig­na­ture achieve­ment of this PNM Gov­ern­ment, giv­ing back to tax­pay­ers, as we promised, sig­nif­i­cant re­turns on pub­lic funds used in the bailout of Cli­co."

NIF is al­so clear­ly a per­son­al sig­na­ture achieve­ment of Mr Im­bert, as it has deep­ened and widened the in­vestor base of T&T. NIF has al­so pro­vid­ed in­di­vid­u­als and com­pa­nies with tax-free in­vest­ments that have paid, and will con­tin­ue to pay, hand­some re­turns.

It would be a tragedy if the Gov­ern­ment's im­ple­men­ta­tion of NIF2 were de­layed at this time as a re­sult of the in­ter­pre­ta­tion of an agree­ment.

For the good of all the po­ten­tial in­vestors in NIF2, may I be so bold as to call for the two sides to find the cen­tre on this is­sue.