Home' Trinidad and Tobago Guardian : February 19th 2015 Contents BG4 | COVER STORY
BUSINESS GUARDIAN www.guardian.co.tt FEBRUARY 2015 • WEEK THREE
Documents made available to the Business Guardian reveal
that the sale of eight assets by the CL Financial group generated
over $5.5 billion (US$872 million) between 2011 and 2013 in
sale processes that generated sums in excess of the independent
valuations in seven of the eight cases.
But of the US$872 million generated by the sale of assets
in CL Financial, the group once chaired by Lawrence Duprey,
over US$614 million was used to pay off debts of the companies
that were sold, resulting in net proceeds of US$258 million
that is being held in escrow accounts pending the full resolution
of the repayment of CL Financial's creditors, the documents
The documents do not detail the sale of Methanol Holdings
(Trinidad) Ltd, which was considered to be a Clico asset, and
makes no mention of the sale of Republic Bank, Angostura
or Clico's traditional insurance portfolio.
Under the Memorandum of Understanding (MoU), signed
on January 30, 2009, CL Financial committed to the Govern-
ment that it would dispose of certain named assets as well
as other assetrs held by the group in order to repay to the
Government funds that had been expended in support of the
group's financial entities---Clico, Clico Investment Bank (CIB),
British American Trinidad (BAT) and CMMB.
Having become aware of the sale of Clico Energy in February
2009, shortly after the MoU was signed, and in view of the
fact that CL Financial still had considerable control over assets
that were not legally resident in the financial entities, the Gov-
ernment decided that it needed to exercise further control
over the CL Financial assets than was afforded by the fact
that the Central Bank had assumed full control of Clico, CIB
and BAT under the provisions of section 44 of the Central
In June 2009, therefore, the Government executed a share-
holders' agreement with the majority shareholders of CL
Financial, under which the Government was empowered to
appoint four our of seven directors of CL Financial, thereby
effectively gaining control of the asset divestment process.
Under the shareholders' agreement, a number of assets were
sold in oaccordance with the following process:
Up to date valuations were sought and obtained from rep-
utable valuers for each asset to be sold;
Under the management of the board of CL Financial, bids
were openly invited from potential purchasers for each asset
and each bid was evaluated;
The sales process for each asset was managed by independent
advisors as follows:
The disposals of Primera and Lawrenceburg Distillers were
managed by PwC;
The disposals of Lascelles deMercado and Burn Stewart
Distillers were managed by UBS;
The disposals of Hine and Dugas (two European drinks
companies) were managed by Winchester Capital; and
The disposals of Valpark Shopping Plaza and Atlantic Plaza
were managed by Ernst & Young
Valuations conducted in respect of each of the companies
listed above amounted in total to US$560 million for the foreign
companies and to TT$94.75 million for the two local com-
panies---Valpark and Atlantic Plaza.
The actual proceeds from the sales of the foreign companies
totaled US$841 million, which was US$280 million or 50 per
cent higher than the valuations that the group had received.
In the case of the local companies, sales proceeds of TT$158.5
million amounted to TT$63.75 million or 67 per cent more
than the original valuations.
Disposition of proceeds
Each of the companies sold, as listed above, had several lia-
bilities that had to be treated with from the sales proceeds,
resulting in net proceeds of US$258 million in the case of the
foreign assets and TT$ million from the local companies.
These funds are being held in escrow accounts pending the
full resolution of the repayment of debts to CL Financial's
creditors, including the Government.
The sales process
The asset sales began in earnest in 2011 with the sale of
Primera Energy Company, and the most recent sale was of
Dugas in November 2013.
The delay in starting these sales, which had been contem-
plated in 2009, was considered prudent in light of the fact
that each of the companies carried significant debt burdens
and that any attempt to pursue aggressively "fire sale" trans-
actions in the weak markets of 2009 to 2011 would have yielded
significantly counter-productive results.
The actual performance of the sales conducted shows the
value of that restraint, since sales values significantly exceeded
valuations and have provided surpluses for meeting CL Finan-
cial's debt to the Government.
Assets still to be sold
The Central Bank, Government, Clico and CL Financial
have adopted a collaborative approach to generate the best
results from future asset sales including the potential sale of
Methanol Holdings (International) Ltd, the methanol producer
based in Oman.
In addition, discussions are currently underway to extend
the approach as far as possible to the disposal of any other
assets that may be required in order to facilitate the full repay-
ment of the debt to Government and other creditors.
Primera Energy was involved in the exploration for and pro-
duction of crude oil and natural gas.
Reason for sale
The sale of shares in the Primera group was undertaken in
August 2011 because CL Financial was unable to meet its debt
obligations related to the acquisition of its interests in Lascelles
CL Financial had defaulted on its debt repayments on several
occasions and the only relief granted was extensions of the
principal repayment to the noteholders. The proceeds of the
sale of the Primera group were targetted to meet the quarterly
interest obligations to prevent the principal calls from being
In February 2011, PwC provided an independent valuation
of the Primera group of US$33 million.
PwC was selected to manage the sales process and the com-
pany was sold in August 2011. The sales proceeds of US$50.7
million comprised US$27.4 million and US$23.3 million notes
Use of proceeds
The US$27.4 million in cash was used for the repayment
of part of the Lascelles deMercado notes held by CL Spirits
Ltd. In a transaction with Clico for the repayment of amount
on the Clico debenture, Clico became owner of the US$23.3
million notes as well as the CL Spirits Note in final settlement
of the Clico debenture.
The company was a diversified producer pf alcoholic beverages
CLF ownership Independent valuation Sale price Excess over valuation
Lawrenceburg Distillers 100%
Lascelles DeMercado 87%
Valpark Shopping Plaza 100%
from CLF asset sales
Former executive chairman of the CL
Financial group, Lawrence Duprey, beams
during the January 30, 2009 press
conference to announce the Government's
bailout. Former CL Financial executive
director Andre Monteil is in the background.
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