Two years after rejecting an offer from Republic Bank, the Barbados government reversed its position and accepted a reduced offer for shares in the institution formerly known as the Barbados National Bank because of its continuing financial concerns, local and regional sources said yesterday.
If the offer is accepted by all remaining shareholders, it is estimated that the transaction will result in an injection of US$83 million into the Barbados economy-an inflow of foreign currency that the Government of Barbados, which owns an estimated 28 per cent of the Barbados bank, finds "attractive at this time," regional sources said.
Barbados Central Bank Governor Delisle Worrell said in October that for the first nine months of the year that the country's foreign reserves had dropped by US$108 million to $1.3 billion, representing around four months of imports of goods and services.
Republic Bank had originally acquired 57 per cent of the shareholding in the Barbados National Bank in 2003 and has since increased its holdings to 65.14 per cent. Two years ago, Republic Bank had made a previous attempt to acquire the 34.86 per cent of the bank it does not own, but had decided to discontinue the pursuit following a failure to agree on the share price.
Republic announced last week that it had received regulatory approvals from the Barbados government, the Central Bank of Barbados, and the Financial Services Commission to make an offer to purchase the remaining shares in the bank, which was renamed Republic Bank (Barbados) Ltd four months ago.
Two years ago, Republic's managing director, David Dulal-Whiteway, said that although the group was satisfied with its existing shareholding in BNB, it had been willing to acquire the additional shares since the Government was desirous of selling.
Following discussions with the Government, both parties were unable to agree on an appropriate transaction price and as a result, the Group would not be proceeding with the transaction at this time.
According to last week's statement, Republic Bank is offering all other shareholders to purchase their stock in the bank for BDS$5 (TT$16.28) per share, starting yesterday, and this offer will close on December 4. The last traded price for Republic Bank (Barbados) shares on the Barbados Stock Exchange was Bds$5.50 (TT$17.91). In October 2010, Republic had offered the remaining shareholders Bds$5.57 a share.
In making the announcement, Dulal-Whiteway said that full ownership by Republic Bank would allow the Bank's customers in Barbados and the wider Barbadian community to benefit from the availability of a broader range of products and services and social investment programmes.
He said that it will also provide greater career and development opportunities for the employees of Republic Bank in Barbados, through cross-training and exchanges within the Republic Bank Group.
The offer document has been mailed to all shareholders and will be available on Republic's website (www.republictt.com). Arrangements have been made for shareholders to deposit their acceptances of the offer into specially designated boxes at all Republic Bank branches in Barbados. Alternatively, the acceptances can be mailed to the manager, Republic Finance & Trust (Barbados) Corporation, Broad Street, Bridgetown, Barbados.