Chairman of the Emancipation Support Committee Khafra Kambon says racism is still being practised against African people in T&T. Kambon was speaking on Tuesday at a panel discussion on the top
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Howai: CLF funds to reduce T&T’s debt
Funds from the eventual sale of CL Financial assets will be used to bring down the overall level of T&T’s debt, reducing it from 43 per cent to roughly around 35 percent of Gross Domestic Product (GDP), says Finance Minister Larry Howai. Howai added yesterday, “.... So we see continued improvement in the overall level of indebtedness of the Government.” Howai made the points during his contribution to a Supplemental Finance Bill in the Senate.
It was the first time Howai publicly committed to using the proceeds of the sale of CL Financial assets to reduce debt. There had been widespread speculation the CL Financial funds would be used to boost government spending in an election year. Howai who said said no CL Financial assets are up for sale, added, “I’ve received correspondence from CLF regarding this matter (and) received similar assurances from the Central Bank which has control of Clico to the effect there is no truth to these allegations,” he said.
Given the fact these are lucrative assets, there are “many who would like to place their hands on these assets,” Howai said. He added there were exceptions to the sale issue. He said Colfire has been on the market since 2013, but no decision was made on a sale. The other is the the W Hotel in Florida, which lenders were moving to place into receivership.
“As a consequence, the CL Financial group is seeking to effect a sale themselves rather than face the possible further erosion of value that comes from further losses of a ‘forced’ sale by the lenders,” he noted. He said the Central Bank says no assets will be sold until the valuation of the assets of Clico is completed. Exemption to this, are lease properties subject to an option to buy and shareholding in Methanol Holdings Limited and MHL (International) plus certain Tobago real estate.
Howai continued, “One of the big issues for us is the the fact that proceeds from the eventual liquidation of the obligations due to the government by the CLF Holdings will be used to liquidate the outstanding debt obligations which are currently on the book and which have resulted in our debt to GDP level being approximately 44 percent.”
“So the intention is that these assets—once all of the legal issues are addressed—the proceeds from these assets will used to bring down the overall level of debt and based on our expectations regarding liquidation we project that the overall level of debt to GDP, once sales have been put in place, it’s likely to be reduced from 43 per cent, to around the mid- 30s, roughly about 35 per cent of GDP.
Howai also said that despite negative publicity the First Citizens Initial Public Offering (IPO), it was a financial success. “Government’s divesting of approximately 48.5 million shares in an eager investor climate generated over $1 billion in revenue,” Howai said. The IPO also increased the worth of the rest of Government’s First Citizen’s shares. He said the Government’s shareholding in the bank is now worth over $7 Billion—an increase in value of over 100 per cent.
He said the PriceWaterhouseCoopers investigation into the IPO was completed and a report was provided to the Attorney General who forwarded it to the DPP. He said the AG advised the report cannot be tabled until the investigation is complete. “The report from PriceWaterhouse has also been shared with the Securities Exchange Commission which is also conducting an enquiry into the alleged improprieties in the IPO. That started in April and is still ongoing. “
Howai added: “I know there is a perception that the SEC’s investigation is taking an inordinate amount of time. I wish to point out that investigations of such complex financial transactions take time. I’m assured that the SEC is being extra careful to conduct a most thorough and exhaustive examination, precisely because it is of such importance not only to First Citizens and the government, but to T&T as a whole.”
He said the SEC has contracted an recognized team with experience in this business to conduct this most sensitive investigation.” He said government is considering other additional IPOs including Phoenix Park Gas Processors, currently before Cabinet. Also being considered is possible merger between T&T Mortgage Finance with Home Mortgage Bank and the possible listing of this new, merged entity on the Stock Exchange.