Home' Trinidad and Tobago Guardian : March 29th 2015 Contents Q: Governor Rambarran said that $950
million will be paid to the non-assenting pol-
icyholders within three months but that the
Ministry of Finance will have to make arrange-
ments for the assenting policyholders.
What are those arrangements going to be
and in what timeframe?
A: We will seek to coincide the settle-
ments with the three-month period that has
been identified. But because there are some
people who may have converted to the Clico
Investment Fund (CIF), there will be some
discussions that we will have with them around
the issue of perhaps closing off the CIF or
reducing it and allowing those who wish to
get cash out of the process. That may take a
longer period and it also depends on the num-
ber of people who are holders of units in the
CIF being willing to vote in favour of the col-
lapsing of that particular arrangement, which
was put in place a few years ago.
So there are some technicalities as far as
that is concerned, but I want to make the
point that our intention is to make those
assenting STIP (Short-Term Investment Orod-
ucts) holders whole. There is no way we could
make the non-assenting STIP holders whole
and leave the assenting STIP holders in a posi-
tion where they are disadvantaged.
Our intention out of this process is as the
liquidation continues and as the cash flows
come in to us, and go into the statutory fund
and then comes over to Government, we will
arrange to liquidate those persons who are
assenting STIP holders as part of the process.
Q: As the Governor said this morning, it
seems as though non-resident policyholders
will also be paid out of this.
A: We estimate that the amount is about
$410 million for the non-residents and the
mutual fund investors, so we will be making
those whole also as part of this process. The
mutual fund holders can expect that as we
continue the process of liquidation that they
will receive their monies, where they have not
received it to date.
Q: And is the proposal to make cash
payments to the non-assenting policyholders
and the assenting policyholders?
A: Yes, the intention would be to settle
the indebtedness fully in cash. As the cash
comes in, and we are able to start making the
payments out...Remember that with respect
to the assenting STIP holders it is really Gov-
ernment that is standing in the shoes of those
people because we had settled them by way
of the zero-coupon bonds and cash and we
took their rights against the statutory fund.
Now that we know that the statutory fund
has been made whole, as the funds come to
us from the liquidation of the assets, we will
ensure that we make them whole as part of
the process so that they are no worse off than
the non-assenting STIP holders and we will
also recover our funds from what we advanced.
Once we are able to collapse the CIF---to
extent that there is agreement with the
unitholders to do so---then some of the indebt-
edness that is in there, which are Government
bonds, will immediately be liquidated meaning
that those bonds will be extinguished as part
of the process. This means our overall debt
position will change.
Q: Why has it taken six months from
the sale of the MHTL shares in October to
now to arrive at this point? In other words,
some $7.5 billion from the sale of the MHTL
shares would have gone into the statutory
fund and would have put the fund into the
black. But that happened six months ago. Why
has it taken six months?
A: We wanted to go over some of the
computations that we had. We asked Ernst &
Young to take another look at some of the
numbers and to make sure that when come
out and start making promises, we can keep
those promises. I wanted to be absolutely sure
that we were in a position to meet those com-
mitments. We may have some slippage of a
month or two in terms of the sale of assets
and that s fine.
Therefore, I asked that they take another
look at the valuations, they take another look
at the overall total of liabilities. If it is I have
to pay the assenting STIPs, what would the
cost be and how would it be funded? What
are the implications for Government? What
it means of the tail-end of the debt that would
remain to be liquidated? Do any of these deci-
sions compromise the ability to realistically
recover the funds that will remain from the
There were a number of elements that I
wanted to be more certain of before we came
out to make the statements and I think the
Governor and the Central Bank concurred
with that approach also and they wanted to
do their own evaluations to be sure.
Both sides wanted to be very comfortable
before we came out to make these statements.
That time was used to ensure we have a fair
degree of confidence with regard to the rep-
resentations that we make.
Q: What of the shares in Angostura, CL
World Brands and Home Construction:
A: At the end of the restructuring, I
suppose the Governor would have mentioned
that there will be a tailend of the debt. We
expect that within the next 12 to 18 months
we should be able to dispose to the Methanol
Holdings (International) Ltd shares as well as
the Republic Bank shares. That would perhaps
liquidate about 75 per cent of the debt that
is owed to the Government.
We want to see those companies that I men-
tioned before continue in operation and there
will be a dividend stream that will be coming
to Government as a result of ownership of
Therefore, we will be working together with
the shareholders of CL Financial to ensure the
remaining tail-end of the debt gets paid out
over an agreed period of time. It could be as
long as ten years with a moratorium.
As part of this arrangement, we expect to
put a debenture in place to ensure we have
full and proper security...
Q: What are the implications of Cor-
poration Sole being the owner of 32 per cent
of a publicly listed company, Angostura Hold-
A: First of all, I don t see that the Gov-
ernment will take any different position. We
have been in effect owners, through CL Finan-
cial, of a number of private companies over
the past few years and there have never been
any issues with that.
The intention here is to put everything
together in a new company, both our shares
and the shares of the CL Financial group,
which will be the company that owns the
assets of these companies going forward. So
this company will be the controlling share-
holder of this new company going forward.
Q: Explain that further please. Are you
suggesting a new holding company for Angos-
tura and CL World Brands? Because there are
minority shareholders in Angostura.
A: No, no no. I am talking about our
shares. Our shares going into a new company,
which will be a company that will own the
shares and exercise the voting rights over...
So instead of being in Government s name per
se, it will be in the hands of this new com-
pany.Q: And what about the CL Financial
shareholders? It seems to me they will remain
with 45 per cent of Angostura, 58 per cent of
CL World Brands and 57 per cent of Home
Construction, which probably totals more than
$3 billion. Is that their settlement out of this
A: We expect that coming out of this
that of course excluding the related party
shareholders---there were certain shareholders
who we continue to leave out of this particular
arrangement---the intention is that once all of
these remaining liabilities are paid at the tail
end, that this company will revert to the orig-
Continues on Page SBG5
MARCH 29 • 2015 www.guardian.co.tt SUNDAY BUSINESS GUARDIAN
COMMENTARY | SBG3
Finance Minister Larry Howai says
T&T is starting to see the light at
the end of the tunnel as far as the
collapse of the CL Financial empire
is concerned. Speaking at a hastily
called news conference at the
Ministry of Trade's offices at the
Nicholas Tower in Port-of-Spain, Mr
Howai said the process of making
payments to Clico's policyholders
will "take some time" because it
involves the sale of assets of the
insurance subsidiary of the CL
Financial group. The minister's
responses followed an organised
news conference held on Friday
morning by Central Bank Governor
Jwala Rambarran on the Clico
Resolution Plan at which he outlined
proposals to ensure that all Clico
policyholders, both short term and
long term, are given full value for
their investments in the company.
In the first phase of the resolution,
the Government will receive $4
billion in cash and Clico's shares in
Angostura, CL World Brands and
Following is a lightly edited excerpt
of the Finance Minister's answers to
questions from the Guardian's chief
editor-business at the news
Is Howai wary of Duprey?
I don't think the taxpayers will be
comfortable about assets going back
into the hands of persons who may have
created this debacle in the first place.
Minister of Finance
Former executive chairman, CL Financial
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