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WEDNESDAY, MARCH 27, 2019
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Cayman deal to ‘triple’ RoyalFidelity pensions By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
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BAHAMIAN investment bank is simultaneously closing the $40m financing for its management buyout while pursuing a Cayman acquisition that will “more than triple” its pension business. Michael Anderson, pictured, RoyalFidelity Merchant Bank & Trust’s president, told Tribune Business yesterday that he expected to close the $20m preference share capital-raise this week once “final confirmations” were received from potential investors. This will combine with $20m in equity financing, put in place in December, to finance the investment house’s management-led buyout from Royal Bank of Canada (RBC) and its
• Takes group’s book from 4,000 to 14,000 ‘lives’ • $140m asset boost to aid Caribbean roll-out • $20m pref raise for buyout to close this week • Both deals targeted for end-April completion
Fidelity parent group. With Royal Fidelity now also completing the documents required to obtain approval from the Central Bank of The Bahamas and Barbados regulators, where it also operates, Mr Anderson said he hoped the transaction will close by mid to late April.
He then revealed that the now-independent investment bank is effectively pursuing two parallel paths at the same time, for it is aiming to close the acquisition of its former parent group’s Cayman Islands-based pension administration within weeks of closing its own buyout. Mr Anderson told this newspaper that the Cayman deal, once completed, would “more than double, maybe even triple” RoyalFidelity’s portfolio in terms of “pension lives” covered, adding 10,000 clients to the existing 4,000 it has presently.
Around $140m in assets under management will come with the Cayman deal, with the RoyalFidelity chief confirming that the acquisition will provide a springboard for the investment bank’s planned Caribbean expansion over the next five to ten years as it seeks to roll-out its investment banking products and services across the region. “I’d hoped it would all be finalised by now, but we’re very close to closing it,” Mr Anderson told Tribune Business of the capital raising to finance RoyalFidelity’s buyout from its
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‘Uneven’ financial access is hidden in The Bahamas By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
THE Bahamas’ high per capita income and welldeveloped banking industry hides “very uneven access” to financial services, the Central Bank’s governor said yesterday. John Rolle, pictured, addressing two workshops held in this nation by the Alliance for Financial Inclusion (AFI), of which The Bahamas is a member, said the commercial bank withdrawal from sparselypopulated Family Islands and the continued pressure on correspondent banking relationships were two threats to local access to financial services. He added that The Bahamas’ own experience showed how “headline”, broad-based economic indicators could obscure the on-ground social and economic realities - including
the different levels of access to financial services on different islands across the archipelago. “On a per capita basis, The Bahamas has the third highest GDP in the Western Hemisphere. Our financial sector is highly developed, when considered in terms of the size of the deposit base and outstanding credit of the domestic banking system, relative to GDP, and in terms of the share of the population that has access to basic banking services,” Mr Rolle said.
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Hotelier demands Architects: ‘Free us from building control bondage’ • Code violations ‘indictment’ of agency ‘prohibitive zoning’ • Govt ‘losing 80-90% of professional fee VAT’ • No progress on ‘21st century upgrade’ offer on vacation rentals By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
By NATARIO MCKENZIE
Tribune Business Reporter
nmckenzie@tribunemedia.net A FAMILY Island resort operator yesterday suggested the government consider introducing a license fee for vacation rentals based on the number of bedrooms and, possibly, prohibitive zoning. Edwin Mulford, a longtime boutique resort operator on Cat Island, reiterated concerns that the government is missing out on significant tax revenues related to the sector. He argued that payments to landlords - locals and foreign - are frequently made outside The Bahamas via the Internet, never touching this nation, while occupancies at small hotels are being adversely affected. Mr Mulford warned that the government cannot be seen as being “in bed” with Airbnb alone. “It’s a reflection that they - government - are not capable of monitoring/policing this, and will have fees tacked on. There is also Home Away, trip advisor, VRBO and some others as well as direct bookings from repeat guests,” he added. “The only solution to control and police this I see is a licensing fee based on bedrooms. Then there is the issue of it hurting the small hotels’ occupancy; mostly on the Family Islands. I don’t have answers for this problem other than to
perhaps consider regulating rates per day to mirror hotel rates, and possibly prohibitive zoning, meaning not allowing private rentals within say one mile of an existing hotel.” Dionisio D’Aguilar, minister of tourism and aviation, in a recent interview with Tribune Business voiced hope VAT could be imposed on Bahamian vacation rentals in the upcoming 2019-2020 budget despite the multiple complexities involved. He was speaking after Airbnb released data showing that its 1,700 “hosts” in The Bahamas welcomed around 59,000 guests in 2018. These persons stayed for an average of five days and, based on a $7,500 median income received by a “typical host”, the sector injected a total $12.75m into the latter’s hands last year. The government has long planned to collect VAT from the vacation rental sector but, when asked when this would likely come into effect, Mr D’Aguilar said: “It’s out of my silo. It’s kind of in the silos of the Ministry of Finance. They are trying to work out the complexities of taxing this particular industry.” KP Turnquest, deputy prime minister, pledged that the government would “not disrupt” the booming vacation rental market as
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ARCHITECTS yesterday urged the government to “free us from the bondage of building control”, warning it was “missing out on” up to 80-90 percent of VAT due on professional fees. Gustavus Ferguson, the Institute of Bahamian Architects (IBA) president, told Tribune Business that the professional body had been “taken aback” by recent government assertions that many hurricane-damaged properties were not compliant with The Bahamas building code. He and the institute argued that these remarks, made by Ministry of Works parliamentary secretary,
Iram Lewis, effectively amounted to a damning “indictment” of the Ministry’s Building Controls Department given that this unit was responsible for code compliance, inspections and enforcement. Mr Ferguson accused the Building Control Department of “contravening the law”, and itself helping to foster the code non-compliance that the ministry is complaining about, by accepting building drawings from persons not licensed to practice by the Professional Architects
Board (PAB) and other selfregulatory industry bodies. He added that the Institute had repeatedly made suggestions on how the Building Controls Department’s practices can be “upgraded to the 21st century”, and make the approvals process both more efficient and less costly and time consuming, but had made little progress in nearly two decades. Reiterating previous calls for licensed Bahamian architects to be able to submit plans and drawings electronically, and for
code inspections to be outsourced to them and other construction/engineering professionals, Mr Ferguson said this nation was the last in the English-speaking Caribbean to retain a Building Controls Department. All other states possess only a Planning Department - a structure that the Institute yesterday called on The Bahamas to adopt, doing away with building controls and moving to a less bureaucratic, more self-regulatory system.
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Port Authority willing to ‘broker’ fake device deals By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net ACTIVISTS yesterday said the Grand Bahama Port Authority (GBPA) had expressed a willingness “to step in and broker” settlements to the island’s “fake energy saving devices” controversy. Pastor Eddie Victor, head of the Coalition of Concerned Citizens (CCC), a long-time Grand Bahama Power Company critic, told Tribune Business that the GBPA was eager to resolve the issues between the utility and residents/businesses who had these devices installed. He added that the coalition had “petitioned” members of the GBPA
• Activists ‘petition’ for consumer protocol • Say GB Power relied on city ‘bye-laws’ • Pledge to ‘intensify’ campaign efforts regulatory committee, which is supposed to oversee and supervise GB Power, to improve the “protocol” for how such consumer-related matters were handled in the future. Expressing concern that current arrangements between the GBPA and GB Power were inadequate, Pastor Victor said it emerged at the meeting that the utility had been relying on Freeport’s byelaws to justify its actions. GB Power’s interpretation, he suggested, was that these gave it the right
to immediately disconnect customers suspected of electricity theft. However, Pastor Victor argued that the disconnections were “very wrong” because they were based on “suspicion” not “concrete proof”. He reiterated previous accusations that GB Power is “strong arming” businesses to settle, and agree payment plans on its terms, by either refusing to reconnect power until such a deal is reached. Pastor Victor said three of the seven Cooper family fast food franchises, which
were among the first prominent businesses to be disconnected, remained without power supply as does Sav Mor, the largest supplier of over-the-counter drugs on Grand Bahama. While GB Power has acknowledged that these businesses, and other companies and residents like them, are likely the “victims of a fraud” perpetrated by those who sold and installed devices that could never delivered what they promised, this does not change
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