06202016 business

MONDAY, JUNE 20, 2016

business@tribunemedia.net

Hard Rock saga exposes business ease ‘black hole’

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net THE former Hard Rock Cafe (Nassau) franchise’s road to liquidation was marked by high utility costs, poor labour productivity, crime and the ongoing problems affecting downtown Bay Street.

Documents filed with the middle Florida federal court chronicle HRCC (Bahamas) unhappy decade as Hard Rock’s Nassau franchisee, detailing a tale all too familiar to many Bahamian businesses and entrepreneurs.

The papers, including emails dating back almost a decade, were released last week but are as relevant today as they were then, given how little has changed in terms of high crime levels, the ‘ease of doing business’, and the condition of downtown Nassau They detail how:

Tribune Business Reporter

nmckenzie@tribunemedia.net BEC’s former executive chairman has slammed his successor’s meeting with the private sector as “hot air and elementary rhetoric”, telling this newspaper: “I was most unimpressed.”

Leslie Miller told Tribune Business that he left last week’s breakfast meeting between Pam Hill, Bahamas Power & Light’s (BPL) new chief executive, See PG B5

Lost ‘horrendous’ sums from being open at night Turned down by four banks for overdraft facility Bahamian management ‘lacked exposure’ * HRCC (Bahamas) repeatedly requested to close at night within a year of taking over the Hard Rock (Nassau) franchise’s operations in 2004 from a See PG B7

Says Chamber meeting ‘a gross insult’ Claims new manager offering nothing different Only change is switch from Bahamian to foreign

Gov’t urged: Avoid ‘cookie cutter’ over FI airport upgrades

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net THE Government has been urged by a senior Bahamian airline executive to avoid the “cookie cutter” approach to the planned $160 million overhaul of Family Island airports.

Captain Randy Butler, Sky Bahamas president, acknowledged that these facilities needed “a lot of tender loving care” to ensure all inhabited Bahamian islands fulfilled their economic potential.

Yet he warned that the proposed infrastructure upgrades could not be done on a ‘one size fits all’ basis, and that careful assessments must be made of each island’s needs to ensure their airports matched.

And, while backing the Government’s publicprivate partnership (PPP) approach to financing the necessary airport infrastructure upgrades, Captain Butler said the fine details would be critical to attracting investors.

See PG B4

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net

Crime, utilities, downtown woes sunk ex-franchisee

Miller attacks BPL’s elementary ‘hot air’

By NATARIO McKENZIE

Govt’s new security near $250m target

Sky chief says ‘tender, loving care’ needed But wants holistic assessments of all islands Warns ‘devil in detail’ on PPP plan proposal

RANDY BUTLER

MICHAEL ANDERSON

THE Government’s new Treasury Note security will finish “pretty close” to its $250 million first-year target, with the last 2015-2016 issue oversubscribed by at least 20 per cent.

Michael Anderson, RoyalFidelity Merchant Bank & Trust’s president, told Tribune Business that last week’s $10 million Treasury Note offering had already

raised $12 million just hours before the Friday close.

The RoyalFidelity chief, who acts as the Government’s financial adviser and placement agent on its domestic debt issues, said the latest sum would take the Treasury Note programme close to its goal in terms of total capital raised.

He added that it was also likely to have reduced the Government’s short-term debt servicing costs by “at least a couple of percentage See PG B6

Latest T-Note offering 20% oversubscribed Saving ‘2% pts’ in debt servicing costs New domestic debt programme for 2016-2017

Aviation attorney ‘turned clients away’ over tax uncertainty

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net A BAHAMIAN aircraft registry must have clarity on its tax and incentive structure to succeed, an aviation law specialist warning that current uncertainties had forced him to “turn away a lot of work”.

Llewellyn Boyer Cartwright, a Callenders & Co attorney and partner, told Tribune Business that the Bahamas must give “much consideration” to how it would develop a competitive advantage over rival international financial centres

(IFCs).

Still, speaking after the Government last week confirmed it had received the final consultants’ report on creating an expanded Bahamian aircraft registry, Mr Boyer-Cartwright urged: “While it has momentum, let’s ride the wave.”

Calling on the Christie administration to make its establishment a “high priority”, the attorney said an aircraft registry would provide “added value” for the Bahamas’ financial services client base, and provide numerous “spin offs” for other industries.

Glenys Hanna Martin,

Backs end to 10% aircraft import duty Bahamas must ‘ride wave’ on registry ‘Added value’, ‘spin-offs’ for key sectors minister of transport and aviation, last week told the House of Assembly that the Government had received See PG B5

$4.15 $4.20 $4.21

$4.21

THE TRIBUNE

Monday, June 20, 2016, PAGE 3

Chinese not obligated to pay Baha Mar contractors

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net THE Prime Minister has conceded that the Chinese are not obligated to compensate Bahamian contractors and other local creditors for what they are owed over the $3.5 billion Baha Mar project.

Perry Christie said this was why he had been “pressing” Baha Mar’s main contractor, China Construction America (CCA), and secured lender, the China Export-Import Bank, to ensure that the needs of all Bahamian unsecured creditors were met.

The Prime Minister was speaking as he continued to refute allegations of “deception” and “collusion” between the Government and CCA over their opposition to the Chapter 11 bankruptcy proceedings, and subsequent removal of original developer, Sarkis Izmirlian, from the $3.5 billion resort development.

He branded the latest criticism by Fort Charlotte MP, Dr Andre Rollins, as “absolutely foolish”, adding that the Government believes an agreement between the Chi-

PM ‘pressing’ to make Bahamians whole Hopes construction agreement ‘imminent’ na Export-Import Bank and CCA to resume construction is “imminent”.

“They are negotiating a construction contract for the construction to resume.

I anticipate that events are accelerating and they are watching,” Mr Christie said of the two state-owned Chinese entities.

“They ought to be watching what is being said, and I hope that they would understand that they are involved in a process where some Bahamians are taking negative advantage, or making an effort to take negative advantage, of them in being able to truly denigrate a process that is being governed by the court and does not have Perry Christie’s hand in it.

“My quest, my intention is to bring about the resump-

tion of construction, the reemployment of Bahamians on that construction site, the payment of Bahamian contractors who earned monies that were not paid.”

Mr Christie’s reference to Bahamians “taking negative advantage” of the Baha Mar situation was clearly a reference to Dr Rollins’ Budget debate contribution.

He then acknowledged that the Chinese had no obligation to pay the Bahamian contractors, or any other local creditors, the outstanding sums they are owed for work on the Baha Mar development.

“As a part of the Government’s involvement, I have been pressing them [the Chinese] to pay a lot of attention to the necessity of meeting the obligation of paying Bahamian contactors, notwithstanding that bankruptcy laws allow them to not do so,” Mr Christie said.

“I have really insisted that we do what is best, and so I have to, as a Prime Minister and a government responsible, be very careful of how I respond to the negatives that have been brought into play, allegations that are being made. I cannot describe

how absolutely foolish those allegations are.”

Some 123 Bahamian contractors are owed a collective $74 million for work carried out on Baha Mar prior to its Chapter 11 bankruptcy filing in late June 2015.

The so-called ‘framework agreement’ between the Government, CCA’s parent, China State Construction Engineering Corporation (CSCEC), and the bank, much-touted by Mr Christie, is extremely vague on whether Bahamian contractors will be compensated in whole or even in part.

“It is expected that many contractors who have participated in the construction of the project will be re-engaged in the process,” the framework agreement statement said. “The requirements of the unsecured creditors will also be considered during the remobilisation.”

Leonard Sands, the Bahamian Contractors Association’s (BCA) president, previously told Tribune Business that while the ‘framework agreement’ had given the industry some optimism, it still felt not all would be fully compensated over Baha Mar.

However, those Bahamian contractors required by CCA to complete the construction work will possess the necessary leverage to ensure they are paid, as they can simply refuse to return to the job site.

It may also be significant that the Prime Minister appeared to only refer to Bahamian contractors, and not other local Baha Mar creditors.

Trade creditors were said to be owed a collective $123 million when Baha Mar filed for Chapter 11 bankruptcy protection in late June 2015.

Standard & Poor’s (S&P) recently pegged these debts as high as $170 million.

Addressing the media at Friday’s Tru Tru Bahamian Marketplace, Mr Christie again defended his administration’s actions in the Baha Mar saga.

However, he again confirmed how powerless the Government is to influence events at Baha Mar, at least for the moment. The real power lies with the Supreme Court, plus the China Export-Import Bank and its Deloitte & Touche receivership team.

Mr Christie also denied, again, that his govern-

ment had decided to grant Chinese requests for 500 Bahamian citizenships, reiterating that Atlantis’s agreements with the Government were an immediate obstacle to such incentives.

“Anything we do for Baha Mar has to be done for Atlantis. That’s their favored nation status they have by agreement,” he explained.

“Everything has to be public whenever we reach that stage. Right now it’s a question of whether the construction company and the bank will reach an agreement and when. We believe it is imminent.”

Baha Mar was initially supposed to open in December 2014, but faced a series of delays, which it blamed on its general contractor, CCA. The resort filed for Chapter 11 bankruptcy protection in a US court last June.

Last October, the Supreme Court put the resort into receivership at the request of the China ExportImport Bank.

A formal sales process for the project began in March when Baha Mar’s courtappointed receivers hired a Canadian real estate firm to market the project to potential buyers.

Resorts to ‘at least’ meet summer goals

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

THE Bahamian resort industry is projecting that it will “at least meet budget” for July and August, following a flat 2016 first half.

Stuart Bowe, the Bahamas Hotel and Tourism Association’s president, said that while industry occupancies have been flat, and the average daily rate (ADR) slightly down, through the first six months of 2016, the industry was “excited” for the upcoming two months.

“For the first six months we have been slightly down in average rate, and basically flat in terms of occupancies,” he said. “The months

Industry endures flat 2016 first half of July and August are the stronger months from an occupancy standpoint, so we are excited about that right now.

“Everyone is forecasting to at least meet budgets.

We will see if we exceed budgets. In the US markets they are forecasting record travel this summer, both for domestic and international travel this summer. The US airlines are forecasting a very strong summer in terms of travel internationally.”

Mr Bowe was speaking at the inaugural Tru Tru

Bahamian marketplace.

The two-day expo, hosted by the Ministry of Tourism and the BHTA, was designed to connect Bahamian producers/manufacturers with wholesalers.

“What we’re doing is exposing the wealth of Bahamian artisans to the tourism industry. At the end of this we are going to advance them on to a virtual platform, which takes them from a manual platform to where you can go online, see their goods and order it.

That is the next step to ensure the trickledown effect and to ensure that money stays in the economy,” said Mr Bowe.

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Inquiries should be directed to J. Albury at 324-7856 (H) or 424-2624 (Cell)

PAGE 4, Monday, June 20, 2016

THE TRIBUNE THE TRIBUNE

Bahamas passengers get Southwest birthday treat SOUTHWEST Airlines celebrated its 45th anniversary on Saturday by treating passengers travelling between Nassau and Baltimore/Washington (BWI) to a Bahamian-themed celebration at the Lynden Pindling International Airport (LPIA).

“Southwest is a customer service company that just happens to fly airplanes,” said Gladstone Adderley, its general manager of ground operations in Nassau.

Southwest began serving The Bahamas on July 1, 2014, with daily non-stop service linking Nassau to Baltimore-Washington International Thurgood Marshall Airport. The Bahamas was one of Southwest’s first routes outside the US. Beginning on Sunday,

August 7, 2016, Southwest will begin offering daily service between Nassau and Fort Lauderdale-Hollywood International Airport as part of its strategy to expand its international footprint out of south Florida.

“We eagerly anticipate this second non-stop destination for our Nassau customers, who will benefit from our friendly customer policies and reliable, friendly service to connect with important moments in their lives” said Mr Adderley. “Certainly, our Bahamian customers will enjoy having two checked bags fly free with no change fees while travelling on Southwest.”

“We are pleased to have Southwest as a partner at

Gov’t urged: Avoid ‘cookie cutter’ over FI airport upgrades From pg B1 Sky Bahamas operates numerous Family Island routes, and Captain Butler cited Cat Island as a prime example of terminal and runway facilities that needed upgrading if its people were to benefit from increased trade and tourism.

“For me, I’ll be happy to see any growth in the Out Islands,” he told Tribune Business. “The airport is the first impression, the front room to your town.

If people get a good experience in your living room, they’ll think the experience in your island, your town will be good.”

The Inter-American Development Bank (IDB) last week warned that the Family Islands will be unable to capitalise on a projected 2.4 per cent annual growth rate in air passengers over the next 17 years unless their airports are brought to “the highest possible” standards.

It added that these islands cannot improve their

tourism and economic competitiveness without a major overhaul of their 28 airports, which have “lacked investment for some time”.

Captain Butler said efforts to address the deficiencies at airports in islands such as Cat Island and Andros were “muchneeded”. The weaknesses included pot-holed runways and lighting systems that were poorly-maintained, and inadequate to support night flying.

A $35 million IDB-financed project, the ‘Airport Infrastructure Programme’, aims to address these problems by identifying the Family Island airports best-suited to a replication of the ‘NAD model’.

This has overseen the transformation of Lynden Pindling International Airport (LPIA) via a $409.5 million public-private partnership (PPP).

Under this model, the Government has retained 100 per cent ownership of LPIA and all its assets, while handing over the

LPIA and congratulate them on their 45th anniversary,” said Jan Knowles, LPIA’s vice-president of marketing and communications.

“They have had an eventful four-plus decades of growth, moving from a mere three planes when they started in 1971 to now having a fleet of 700 planes and 50,000 staff members around the globe. As they continue to grow, we look forward to them further expanding various direct routes to Nassau Since launching its lowfare/high-value model on June 18, 1971, Southwest has grown to become the largest airline in the US, carrying nearly one in four air passengers each day. airport’s daily operations and management to Nassau Airport Development Company (NAD), part of Vantage Airport Group.

The IDB-financed project will assess 13 Family Island airports to determine whether they are suitable for a NAD-type PPP, and also develop the best structure for agreements between the Government and the private sector relating to their ownership and financing.

Captain Butler, though, warned the Government to ensure that the consultants hired to carry out this assessment “don’t go with a cookie cutter and do the same thing with all the airports”.

He added: “The Family Island airports need a lot of tender, loving care, but it has to be planned. Don’t just go and do it.

“Look at the whole community. The runway may be nice, the airport may be nice, but if the main road is badly pot-holed and the clinic has no medicine.......”

Captain Butler said the consultants hired for the IDB project needed to conduct “needs assessments” of every Family Island and its airport facilities, determine current and future

THE CAPTAIN receives Bahamian treats from Gladstone Adderley, Nassau station manager for Southwest Airlines. demand, and then decide what upgrades were necessary.

Taking Andros as an example, Captain Butler said most visitors came for fishing, snorkelling and diving on its reefs, and the ecology and environment.

This customer base, he added, would influence both the size of any upgraded airport, how it was built and the type of construction materials used.

“I was in Crooked Island, and the folks wanted us to come there, but the accommodation is not sufficient,” Captain Butler said, adding that the solution would require involvement from the likes of Ministry of Tourism and the Bahamas Development Bank (BDB).

“I do believe it [the PPP structure] could work, but I think you have to start with the planning and see where it goes, and look at strategic development,” Captain Butler said.

“Who are going to be the private people on the other side? Is it the hotels on the island that are going to partner with the Government? Who’s going to be allowed to do that? What are the criteria for PPP participation?”

He also queried who would have responsibility, and overall charge, for airport functions such as security and fire crash rescue

under a PPP-type arrangement.

The bulk of the IDB loan, some $33 million, will be spent on financing the Government’s share of the investment required to upgrade the airports suitable for PPPs. “The 28 Family Island airports in the Bahamas have been in need of investment for some time and require a wide range of aviation and infrastructure upgrades to improve their regional and global integration,” the IDB report, revealed by Tribune Business, said.

“The airports require maintenance and improvements in operating conditions, and also protection of the airside and its operation protected zones.”

The IDB report continued: “It has been projected that in the next 20 years, the passenger demands on the Family Island airports would increase by 2.4 per cent annually to reach 1.7 million passengers by 2033.

“For the Family Islands to capitalise on this opportunity, and to have a strong market presence in a very competitive Caribbean tourist industry, it is crucial that the island gateway airports offer the highest possible level of safety and quality of aviation services.”

A previous report by

the Canadian consultants, Stantec, estimated that a collective $160 million investment was required to bring all main 28 Family Island airports into line with international regulatory standards and best practices.

Stantec’s report divided the Family Island airports into Tier 1, 2 and 3 facilities, based on their relative importance, level of aircraft activity and passenger volumes.

The Marsh Harbour, Georgetown (Exuma), North Eleuthera, San Salvador, Bimini and Governor’s Harbour airports were placed into the Tier 1 category.

And the Rock Sound (Eleuthera), Deadman’s Cay (Long Island), New Bight (Cat Island), Fresh Creek (Andros), Matthew Town, Great Harbour Cay (Berry Islands) and San Andros all found themselves in Tier 2.

These 13 will now be assessed by a consultancy firm hired under the IDB project to determine whether they may be suitable for a PPP ownership/operation model, and attractive enough for private sector capital to invest in the infrastructure upgrades.

THE TRIBUNE

Monday, Monday, JuneJune 20, 2016, 20, 2016, PAGE PAGE 5 5

Tourism tackles ‘myth’ impacting yacht market

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net THE Ministry of Tourism is hoping this week’s inaugural Bahamas Yacht and Travel Show will change industry perceptions of this nation, and continue the market’s growth by “leaps and bounds”.

Earl Miller, the Ministry’s general manager of maritime, told Tribune Business that the first-ever show, held this past week-

end, is expected to be the foundation for a bigger annual event.

He added that an “aggressive” programme is in place to pursue the mega yacht category.

“This is the foundation for a bigger show annually to come to the islands of the Bahamas,” he said. “I thought that we would start small and roll out phase two in 2017, where you will see more brokers from the US and Europe.

“We are finding that

Miller attacks BPL’s elementary ‘hot air’ From pg B1 and Bahamas Chamber of Commerce and Employers Confederation (BCCEC) members, “saddened”.

He argued that BPL and its manager, PowerSecure International, were offering no new solutions or anything that Bahamians could not have done.

Mr Miller, who has embarked on something of a ‘one-man crusade’ to convince Bahamians that the BPL deal is bad for the country, said: “I have never seen such elementary stuff.

“It was an insult to me. It was a gross insult. I got up and left. I could only tell the Bahamian people that

I wish them luck for the future. I was most unimpressed. I saw nothing that we are spending money for, nothing at all, and it tore through my heart. I just wish this country luck. Only Christ can save us.”

The media was not invited to the breakfast meeting with Ms Hill, but Mr Miller said: “You didn’t miss a thing”. BPL had scheduled a press conference late last month to discuss its business plan, but that was postponed ‘until further notice’.

BPL and PowerSecure’s first four months in charge of BEC’s operating assets have already seen many of the outages, blackouts and energy supply inconsisten-

Aviation attorney ‘turned clients away’ over tax uncertainty From pg B1 the final report from consultants, ICF, on the path to establishing a new registry and associated aircraft mortgage registry.

Mrs Hanna Martin said ICF had recommended that the Bahamas enter the aircraft mortgage registry business, and laid out a 28-month timetable for its implementation./ She added, though, that its creation would require numerous legal and policy initiatives that Mr BoyerCartwright and others in the aviation industry have previously acknowledged as essential.

Mrs Hanna-Martin said the Bahamas would have to either ratify the Cape Town Convention, which would allow it to recognise liens and charges - such as mortgage loans - held on aircraft , or pass its own legislation that has similar effect.

She acknowledged that fees would have to increase, as those for the existing registry were insufficient to cover its operating costs, while the Bahamas would have to “waive or eliminate” the 10 per cent Customs duty levied on imported aircraft.

Reacting to Mrs Hanna Martin’s 2016-2017 Budget debate contribution, Mr Boyer-Cartwright said her announcement represented “positive progress”.

“It’s a positive step in the right direction,” he told Tribune Business. “If I had my way, I’d like to give it I’m not going to be so bold as to say top priority - but I’d give it high priority, as it ties into the financial services sector, the aircraft maintenance sector and the civil aviation sector.

“I would say it would be well worth the Government deciding to pay close attention to it, and make it happen. Sooner rather than later would be a good thing.

“I hope we just don’t sit on it and let it go by the wayside. While it has momentum, let’s ride the wave.”

While the Bahamas already possesses an aircraft registry, it barely registers as a blip on the radar screens of the international aviation industry and potential clients when compared to the likes of Bermuda and the Isle of Man. This nation also has no aircraft mortgage registry, which would enable lenders to register and protect their interests over planes and aircraft registered in the Bahamas.

Such a facility is an essential complement to an aircraft registry, and vital to the latter’s ability to attract business, as it will prevent plane owners from selling the asset in defiance of a lien/charge attached to it.

Mr Boyer-Cartwright suggested that the Bahamas initially seek to carve out a

specialist niche for itself by focusing on the corporate/ private jet market, a segment that linked well with its high net worth client and resident base.

“There are those private jets looking for a jurisdiction where they can put their aircraft because they have something of value to offer them,” he added.

The Callenders & Co attorney and partner, though, agreed that it was vital that the 10 per cent Customs duty on imported aircraft be eliminated if the Bahamas was to grow beyond its existing registry.

And, with 7.5 per cent Value-Added Tax (VAT) another consideration, Mr Boyer-Cartwright said it was vital that the Bahamas offer a clear, predictible tax and incentive regime to aircraft owners and operators.

“Now that we have VAT, we have to look at other jurisdictions like Malta and the Isle of Man, which have VAT concessions,” he told Tribune Business.

“It’s not that we have to eliminate VAT, but say we have our concessions. It could be that if the aircraft operates outside the VAT zone for a certain period of time, it could be exempt or attract a lower rate.”

Mr Boyer-Cartwright added that tax and incentive policies needed to be codified in law, and not merely left to administrative whim as to whether they were enforced.

“I do know of an aircraft owner, a local company, who is thinking of purchasing an aircraft, but don’t want to register here because of that 10 per cent duty that’s in place,” he said.

“Whether it’s customarily imposed or not, I can’t give my client ad-hoc advice to say they’re not going to do that. I’ve turned away quite a lot of work because of that.

“Now, with VAT in place, you’re talking 7.5 per cent plus 10 per cent [import duty]. What’s going to be imposed in order for us to be competitive? We’d have to give that close, and plenty of, consideration.”

An expanded, competitive aircraft registry is viewed as a significant ‘value-added’ product for the Bahamas’ high net worth residents and financial services clients, many of whom either own or have access to - their own private jets.

It would also complement the Bahamas Maritime Authority’s (BMA) efforts to create a high-end yacht registry, and the tourism sector’s drive to attract wealthy visitors. For these reasons, Mrs Hanna Martin suggested all three industries forge a partnership with the aircraft registry proposal.

Apart from strengthening and diversifying the Bahamas’ product offering, and making the jurisdic-

most mega yacht captains are afraid to come to the Bahamas, citing that the water is too shallow and they don’t want to take the chance with a $20 million yacht.

“We are trying to dispel that myth. You can come to the Bahamas. You may not be able to pull up to every marina, but you can anchor out, which is what most do anyway, and tender in.”

Mr Miller said the spending generated by a mega yacht from just a one-

weekend stay in the Bahamas could be as much as $50,000.

“The yachting, boating industry is growing by leaps and bounds right now,” he said. “Most of the high-end properties or developments coming in the islands want a marina for the mere fact that these boats are getting bigger and bigger, and they have to go somewhere.

“In Florida, which is the boating capital next door, right now there is sort of a moratorium on building

marinas. We just need to let people know what we have, get our amenities in order and get our navigational system in place. We are working on this as we speak,” added Mr Miller.

“A cruise ship coming in may bring 4,000-5000 people, and you may see some of them walking around.

One of these yachts averages 12 people, and while you may not see them, the spend of these boats just for a weekend could be $50,000. The charter is

over $250,000. The impact is tremendous; you’re talking in the millions of dollars.

“In the near future, with the programme we have in place, being overly aggressive in going after this market you will see more of these vessels coming to this market.”

The Ministry of Tourism and “Boat 4 A Day” partnered to host the three-day Bahamas Yacht and Travel Show .

cies that occurred under the previous structure.

Mr Miller now appears to be capitalising on this to argue that he, and the former Board, had all the solutions, unlike BPL and its foreign, private sector manager.

He told Tribune Business: “Our target was that this month Bahamians would have been paying no more than $0.26 cents per kilowatt hour for electricity and there would be no rate increase. There was going to be a dramatic rate decrease.

“We were also going to secure a long-term contract for our fuel, which hasn’t been done yet by this new company. I feel like an inferior human being as a Bahamian when I listened to what I heard. It was just hot air and elementary rhetoric that I heard.

“They are not bringing a single thing to the table that we are not except, that we are Bahamians and they are foreigners,” Mr Miller added. “I was very saddened. I wish I had not gone to that meeting. I might have had a different view. I had a sickness in my stomach after that.

“That was extremely painful for me because I know that with the calibre of people we had on our Board, if we had been allowed, no company could have done anything close to what we were going to do.”

Mr Miller said he and the former Board had managed to save BEC, and the Bahamian people,. more than $20-$30 million during their three-and-a-half years in charge.

“We were ready to take BEC to the next level and

take the burden off the backs of Bahamians. We were going to put new engines out at Clifton that were going to save us $120 million,” he argued.

“There is nothing they could think of doing that we were not doing. When you talk about smart metering we were already spending $3 million on incorporating that system, but we were doing it incrementally.

“They [BPL and PowerSecure] are not bringing one single iota to the table that we were not doing ourselves. It’s a slap in the face to every Bahamian as far as I am concerned, and especially the Board that we had assembled. It makes me feel bad to say that I’m a Bahamian and I’m proud. That went to the core of my being and as a Bahamian born in this country.”

PowerSecure signed a five-year management services agreement with the Government to run BPL, the Bahamas Electricity Corporation’s (BEC) newly-created operating subsidiary, on February 9.

Then, on February 25, PowerSecure announced that the Atlanta-based utility giant, Southern Company, would acquire it for $431 million, with PowerSecure becoming a become a wholly-owned subsidiary of Southern Company.

Jeff Wallace, BPL’s first chief executive, resigned suddenly in March for ‘personal reasons’. Ms Hill, who most recently served as vice-president of retail sales support at Exelon Corporation, a Fortune 150 energy company headquartered in Chicago, was appointed as his replacement.

tion more attractive, an aircraft registry and associated mortgage facility would also boost civil and commercial aviation.

The increased number of Bahamas-registered aircraft, for example, would likely drive an increase in maintenance demand, and tax and structuring advisory work.

“Speaking to the major players over the years, I’ve not had anybody tell me this is not a good thing for their jurisdiction,” Mr Boyer-Cartwright told Tribune Business.

“When you’re looking at registering an aircraft in the Bahamas, you will look to the financial sector to set up a holding company to own the plane. You will pay landing fees and parking fees, and hire consultants, and on you go. It’s a real spin-off.”

Praising Mrs Hanna Martin’s House statement as “progress”, Mr Boyer-Cartwright added: “Hat’s off to the Minister and the Ministry, and all those that have been involved.

“It has come a long way in the last few years. I think everything she touched upon is what I’ve been saying since the outset. It will touch many aspects of the financial services industry, and many aspects of civil aviation and the maritime sector.”

Mrs Hanna Martin, though, said last week: “The Government must now make a decision on when and how we will proceed to implementation.”

Mr Boyer-Cartwright said the ‘when and how’ were the “two key questions” that the Government needed to answer, along with when it

would place a budget and organisation behind the aircraft registry initiative.

He pointed out that rival IFCs, such as Bermuda, Malta, the Isle of Man and the Cayman Islands, were all ahead of the Bahamas and promoting their aviation registries and maritime

sectors together.

“I know a number of smaller operators will be concerned about an increase in fees,” Mr Boyer-Cartwright told Tribune Business, “but we’re not talking about the commercial segments of the market yet.

“We can do what other

jurisdictions did: Start out looking at the corporate/ private jet sector. Start with that, and if the fees cover the cost of running the registry, we’ll be ahead of the game.

It will be the will of the Government to see it move forward.”

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PAGE 6, Monday, June 20, 2016

Govt’s new security near $250m target From pg B1 points” compared to the interest charges associated with bank borrowings.

And, with the current fiscal year set to close in just 10 days’ time, Mr Anderson revealed that the Government would soon unveil a new debt-raising programme for 2016-2017 once all the details were finalised.

“We just went out for $10 million in Treasury Notes,”

Mr Anderson, who acts as the Government’s placement agent and financial adviser, confirmed.

“We haven’t got the final amounts, but we’re up to $12 million at the moment.

The last time we went out we ended up close to $20 million.

“We went out to market expecting, based on discussions with people, to get $10 million and may end up with a little more than $12 million. We’re happy that

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2 Television sets, 1 Pool Table, 1 Glass front beverage Frigidaire, Seven chairs etc.

If not removed by then, all items will be sold to cover costs of overdue rent.

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people have done what they largely said they were going to do.”

Mr Anderson said RoyalFidelity was now tailoring the size of Treasury Note offerings to likely market appetite, with the amount of debt securities issued now much reduced.

“We’re getting smaller chunks of money and smaller offerings, based on what we believed the market wanted and was likely to subscribe to,” he explained.

“Each time, we’re getting closer to what the market expectations are.

“This is the last one [for 2015-2016]. The rollover takes place tomorrow of the last issue we did, and these new Notes will be issued tomorrow [Saturday].”

Treasury Notes have replaced Treasury Bills as the Government’s preferred short-term debt security, and the size of each offering has decreased steadily since the inaugural issue last July.

That finished short of its

$150 million target, raising $100 million, but the two offerings subsequent to that - in August and September 2015 respectively - were 43 per cent and 187 per cent oversubscribed.

The August issue generated $71.3 million, compared to the $50 million target, while the Treasury Note offering one month later raised $21.535 million when the Government had only sought to obtain $7 million.

Mr Anderson said the latest $10 million offering would bring the Treasury Note near to its first-year debt capital target.

“I believe we’ve met the expectations of the Government in terms of the Treasury Note programme. We went out initially and set a target of $250 million for it, and ended up pretty close to that,” he told Tribune Business.

“As a new programme coming to market, it worked out pretty well. Ini-

Share your news The Tribune wants to hear from people who are making news in their neighbourhoods. Perhaps you are raising funds for a good cause, campaigning for improvements in the area or have won an award. If so, call us on 322-1986 and share your story.

THE TRIBUNE tially, it was felt it was going to cannibalise the Bahamas Government Stock (BGS) market, but it hasn’t, and has really helped the Government pay down its shortterm debt with certain banks, and reduce the cost of that debt.”

Besides raising shortterm capital, the Treasury Note programme’s other key goals were to diversify the investor pool beyond the banks and institutional investors who typically bought into Treasury Bills.

And, with the national debt at $6.6 billion and rising, the initiative was also designed to reduce the Government’s borrowing (interest) costs associated with its short-term debt.

Mr Anderson said investor diversification was a longer term goal, as the Treasury Note client pool still largely consisted of institutional investors, such as pension funds and credit unions, although some brokerage clients had bought in.

Greater success had been secured in interest savings for the Government, the RoyalFidelity president saying: “I’m sure they’re not borrowing it at the same rate from the banks. I imagine they’ve saved at least two percentage points.”

Mr Anderson estimated that Bahamas-based commercial banks would likely charge the Government an interest coupon close to the 4.75 per cent Bahamian Prime rate on short-term borrowings.

This compares to the lower Treasury Note rates, which are priced at 1.75 per cent for 30-Day notes. The 90-day version carries a 2 per cent coupon, and the 180-day Notes are at 2.5 per cent., Mr Anderson explained that the proceeds from Treasury Note borrowings were chiefly used to pay down existing Government debt, and deal with the ‘rollover’ of previous issues, rather than adding to it.

The BGS issues, which have replaced the Bahamas Government Registered Stock (BGRS) as the longer-term domestic debt security, are employed to both pay down existing debt - largely replace and redeem BGRS issues as they mature - and for new borrowings.

“A new Treasury Note programme and BGS programme will start after July 1,” Mr Anderson told Tribune Business.

“We have yet to determine the final amounts to be raised, the breakdown of the offerings and the timing of it, and the various interest rates to be paid on the issues. These are all being reviewed.

“We’ll be able to advise the market once we get a better sense from Government as to what they want to do.”

Mr Anderson said the Government’s net new borrowings for 2016-2017, based on the Budget, were “relatively small” at around $99 million.

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THE TRIBUNE

Monday, Monday, JuneJune 20, 2016, 20, 2016, PAGE PAGE 7 7

Hard Rock saga exposes business ease ‘black hole’ From pg B1 company controlled by its landlord, ex-MP Marvin Pinder.

Its principal, Keith Doyle, wrote in May 2007 how the owner of another restaurant near Hard Rock’s Charlotte Street location had been murdered.

He added that his own managers had been mugged, and had their cars stolen, while even his wife and her friends refused to come to downtown Nassau - preferring to drive to the relative safety of Atlantis.

While Hard Rock refused its franchisee’s plea on that occasion, it did accede to another closure request made in late 2011/early 2012. Crime fears, and the absence of cruise passengers in the evening, meant the Nassau franchise was incurring losses significant enough to sharply erode its daytime trading profits. * Mr Doyle, in a November 2011 e-mail to senior Hard Rock International executives, set out why it was so hard to generate the cash flow and profits necessary to reinvest in the Nassau business.

Energy costs were said to be more than three times’ higher than for similarlysized Hard Rock franchises in the US, for instance.

And, while Hard Rock Cafe (Nassau’s) projected 8-9 per cent rate of return was said to be in line with other franchises, Mr Doyle argued that its profits would be “wiped out” if a cafe or kitchen re-fit was required. * Mr Doyle also slammed Bahamian commercial banks for failing to grant HRCC (Bahamas) a $100,000 overdraft facility, singling out Royal Bank of Canada (RBC) in particular, to whom he had offered “an abundance of security”.

Mr Doyle told Hard Rock International that without the overdraft, and revenues being insufficient, he did not have enough cash flow to finance the necessary inventory purchases. * Work permits. Mr Doyle said Hard Rock Cafe (Nassau’s) Bahamian management were “not business builders” because they lacked international exposure and experience.

He acknowledged that Hard Rock International was “not impressed” with the Nassau franchise’s management, but said it was impossible to obtain work permits other than for the general manager post - the most senior position.

The documents provide an instructive tale to politicians on the obstacles to profitability facing many Bahamas-based businesses, and the urgent need for reform in numerous areas to improve the economy’s competitiveness.

What is particularly striking is how little the general economic and business environment has changed since HRCC (Bahamas) started complaining about the impact it was having on its business.

Hard Rock Cafe International, which is battling a lawsuit from HRCC (Bahamas) and Mr Doyle, alleging that it deliberately manufactured the loss of the Nassau franchise so friends of its senior executives could take over, admitted that requests to reduce its opening hours were received every year between 2004 and 2007.

It referred, in particular, to Mr Doyle’s 2007 request, which was justified on the basis of Nassau’s crime problems and the resulting financial woes for the franchise.

“We request again to be allowed to close at night,” Mr Doyle wrote in a May 10, 2007, e-mail. “While this will hurt our gross, it will improve our controllables/occupancy costs, and will also counteract the increasingly sad state of security and ambience in play throughout downtown Nassau in general.

“The owner of the Chinese restaurant across the street was murdered after being followed out with his day’s takings. There have been over 20 burglaries on our street in the past three years. We have had managers mugged, and managers’ cars stolen.

“Until they pedestrianise that street and redevelop [Prince George’s] Wharf, we are doing nobody any

favours by staying open at night,” he continued.

“The expat market will not come down here (even my wife’s many friends) because of safety - they all drive by and go to Atlantis, where they pay more, but feel safe and are in a pretty area.”

Mr Doyle said he was “working extremely hard” to make Nassau viable, adding that it had “overperformed” in the areas the franchise could control, such as sales per foot.

He warned, though, that costs were “outstanding”, and described utilities and marketing costs as “increasingly tough to manage”. The royalty payments to Hard Rock Cafe International, and the Nassau franchise’s insurance were also described as “killers”.

Hard Rock International, though, denied HRCC (Bahamas) 2007 request for reduced opening hours.

Thomas Perez, its area vicepresident for the Americas and a defendant in the HRCC (Bahamas) lawsuit, even accused Mr Doyle of “sensationalising” Nassau’s crime problem in a bid to obtain his demands.

“I have visited Nassau on multiple occasions, including in the evenings,” Mr Perez alleged in a May 31, 2016, affidavit. “While there, I have not observed a ‘bad’ security situation.

“Obviously, every city has its challenges with crime, and I believe many of those were sensationalised by Mr Doyle as a subterfuge to obtain his desired reduction in operating hours.”

Mr Perez acknowledged that the bulk of the Nassau franchise’s profits were generated in the daytime by cruise ship passengers, but said guests expected that as an international brand Hard Rock Cafe would be open in the evenings.

“I also found that, having visited Nassau, there were a number of other businesses open into the evenings that had a fair number of customers and a lively environment,” he alleged.

“In comparing this to the Nassau cafe, on many occasions what I observed was a lack of a strong and committed effort to attract a nighttime business, with the notable exception of when Brynn Felix was the general manager there between the fall of 2007 and 2010.

“During that time, the requests for reduced hours subsided remarkably because Mr Felix did establish a night-time business and was committed to bringing in local and hotel customers.”

Undeterred, Mr Doyle resumed his request for early evening closures in late 2011, again citing crime concerns and the impact on Hard Rock Cafe (Nassau’s) financial performance.

A November 17, 2011, email to Alfonso Moreno, Hard Rock’s director of development and franchises for the Americas, recalls their meeting and the issues impacting the Nassau franchise’s ability to be profitable.

“We spent much time discussing our main concern, lack of adequate profitability, and examined in detail the Nassau five-month (May-September) financials, which showed us making a loss for four out of five months,” Mr Doyle told Mr Moreno.

“You thought that the majority of our costs (merchandising/food) appeared to be reasonable, and that staff costs are lower than Cayman and some other cafes, but that our electric costs, in particular, appeared to be the main problem.

“Indeed, you make a very good point by comparing us to similar-sized US cafes that pay $5,000 per month ($60,000 annually) as compared to our average of $17,000 per month ($200,000 annually).”

Mr Doyle then illustrated the ‘vicious circle’ very familiar to Bahamas-based companies, ranging from large hotels to ‘Mom and Pop’ stores, which is how insufficient profitability and cash flow undermines reinvestment in the business.

“In response to your question about what we expected our net profits would be for the year, I said that we should make $300,000$400,000 on revenues of

about $4.5 million,” Mr Doyle told Mr Moreno.

“You mentioned that this 8-9 per cent return was in line with other franchisees.

I stated that it is far too low for us because if we have to do a re-fit of the cafe or kitchen, that it would effectively wipe out profits and it left no profit if we have to pay back borrowings.”

Mr Doyle said cash flow difficulties, and the inability to obtain an overdraft facility from a Bahamian commercial bank, had resulted in Hard Rock Cafe (Nassau) being unable to purchase sufficient glass and merchandise inventory.

“I explained.... that our partner and ourselves did not want to put any more money into the business, but to make the business pay its way as our other businesses do,” he wrote to Mr Moreno.

“You correctly stated that without having merchandise we couldn’t generate additional revenues, but I also countered that $4.5 million revenues in Nassau was, in fact, a fantastic revenue figure and that we should be showing a large profit.”

Disclosing that HRCC (Bahamas) injected a further $50,000 into the Hard Rock Cafe (Nassau) franchise the week before, Mr Doyle reiterated: “We have to make both operations (Nassau and Cayman) pay their way, and we have to stop pumping money into them.

“I explained that the reason we were short of merchandise was because we were not making any money to pay for the merchandise.

“I showed you my correspondence with Royal Bank of Canada, offering them an abundance of security, and they still turned us down for an overdraft of $100,000.

I mentioned that a total of four banks had turned us down for facilities in Nassau.”

Turning to labour issues, Mr Doyle then told Mr Moreno: “We discussed Nassau management, which you are not impressed with, and I explained that we cannot get work permits for foreigners other than at general manager level.

“We both agreed that the managers are honest and very nice, but that they are not business builders.

I agreed with you that our management team are not experienced, since they have no international exposure.

“You suggested that we have a sales and marketing manager, and although your suggestion has merit, I want to see us make money first on the $4.5 million revenues we currently generate before we invest in any more managers.”

Mr Doyle followed up two weeks’ later with a costing exercise, featuring numbers purporting to show how much Hard Rock Cafe (Nassau) was losing at night.

“We believe that we are

losing - and have lost - an horrendous amount of money in Nassau by having to remain open at night without the prospect of any viable cruise-related business, which during the day generates profitable retail sales for us,” he wrote to Mr Moreno on November 20, 2011.

“I mentioned that I expected that we could add $300,000-$400,000 annually by reducing night-time hours, and the costing exercise performed does appear to substantiate that we can re-claim substantial wasted profits and reduce our costs significantly.”

Mr Doyle’s costing exercise, based on a 17hour day spread over five months, showed that the Nassau franchise generated $122,000 in retail sales, and $68,000 in food and beverage revenues, after 7pm.

“The overall loss to us in generating these sales after 7pm is $147,000,” he added.

“In other words, the cost in generating these sales is $337,000.

“Operating in the timeframe after 8pm, the sales radically collapse to $36,500 for retail, and $53,000 for food and beverage, and the overall loss for this timeframe is $145,000. The cost in generating these sales is $234,000.

“Extrapolating these losses in Nassau over a full 12 months, they amount to a net #352,800 operating after 7pm, and $348,000 operating after 8pm,” Mr Doyle continued.

“These losses are subsidised by profits taken from elsewhere in our business or by additional investment into our business.

“These figures are only a part of the black hole that we are experiencing. Generating $4.5 million in sales as a top-brand restaurant, we should be generating terrific profits.”

This message was reinforced by a March 8, 2012, e-mail, in which Mr Doyle described the Nassau franchise’s evening hours as “massive loss makers”.

“Nassau, at night, is simply too dangerous, and we want to focus our management and staff resources to increase daytime business, when the highest concentration of tourists are swarming the streets, and the profitable area of retail sales can be best maximised,” he wrote.

Mr Doyle predicted that Hard Rock Cafe (Nassau) would lose $150,000 over the May-November period if it remained open at night.

And, with the business’s annual rate of return (ROR) at around 4 per cent, that $150,000 was vital for “an ageing cafe to operate with a reasonable cash flow that allows us to pay for retail stock”.

“Although our overall retail sales in Nassau outstrip our food and beverage sales by a ratio of 58:42, after 7pm these retail sales for the entire 12 months reverse

their positive performance to a very disappointing ratio of 29:71, which effectively is a ‘loss making ratio’,” Mr Doyle wrote.

“Our 12 month figures show that after 7pm, retail sales collapse to only account for 5.94 per cent of total sales, while food and beverage sales fall to 15.2 per cent of total sales.”

Hard Rock International initially disputed Mr Doyle’s figures, telling him that $378,309 in sales was ‘missing’ from his costing exercise.

Mr Doyle, in response, blamed this on a ‘mapping’ problem with the franchise’s hourly reports, which his Nassau technician had been unable to resolve.

Hard Rock International eventually agreed to Mr Doyle’s request for a change in the Nassau franchise’s operating hours, one of its main concerns being the loss of royalty payments to itself, which were based on HRCC (Bahamas) revenues.

Royalty payments feature heavily in the ongoing dispute between Hard Rock International and HRCC (Bahamas), with the former alleging that the Nassau franchise was eventually pulled because of the failure to pay sums owing.

Mr Doyle and HRCC (Bahamas), though, are alleging that intransigence and foot-dragging by Hard Rock International and three of its executives on its requests for reduced opening hours and other “concessions” produced the financial losses that resulted in its closure.

They are claiming this was all part of a plan to

‘squeeze’ HRCC (Bahamas) out, and manufacture its closure, so the Nassau franchise could be handed to friends of Mr Perez, namely Paul Zar and Anders Vestergaard.

This allegation has been vehemently denied by all parties involved on the Hard Rock International side, including ex-Bahamian MP, Mr Pinder.

His company, Thirty 3 Ltd, took over Nassau’s Hard Rock franchise after HRCC (Bahamas) went out of business, and Mr Pinder is adamant he sought out Messrs Zar and Vestergaard himself to run the business.

Numerous questions surround HRCC (Bahamas) purported liquidation, given that the Bahamian accountant appointed to oversee the process asked to be removed within two months of his name being submitted in March 2014.

Paul ‘Andy’ Gomez, now the Bahamas’ ambassador to China, was initially nominated as the former franchisee’s liquidator.

However, Kendrick Christie, his Grant Thornton (Bahamas) colleague and partner, told Tribune Business via e-mail: “Records indicate that former Grant Thornton managing partner, Paul Andy Gomez, notified the shareholders of HRCC on May 29, 2014, to remove his name from consideration as the company’s liquidator.”

Meanwhile, Keith Doyle, son of Kevin Doyle, has asked Tribune Business to clarify that he is not a party to any lawsuit involving the Hard Rock Cafe (Nassau) battle.

PAGE 8, Monday, June 20, 2016

THE TRIBUNE

Could British EU exit be watershed for global economy?

FRANKFURT, Germany (AP) — A British exit from the European Union could cause global market swings for a while. But that would soon pass.

If we're lucky, that is.

Much darker scenarios for the global economy are also being discussed by economists as they try to gauge the risks of Thursday's referen-

dum for the wider world.

While economists say a British exit from the EU — or Brexit, as it is known — would be painful mainly for the country itself and to a lesser extent for rest of the Europe, the consequences for the global economy are harder to estimate.

In the gloomier narratives, a Brexit becomes a

stocks and seeking safety in government bonds, analysts say. The pound has already fallen in value against other currencies and would likely fall more. Gold, seen by some as a refuge in troubled times, might rise.

Markets seem to be betting that "remain" will win, so if they're wrong, there could be some scrambling to adjust.

turning point, an event that snowballs and leads to much larger and nastier problems.

It could deal a setback to free trade and globalization, which many disgruntled voters around the world are already cool on. And it could trigger more defections from the EU, destabilizing the region and unsettling companies and consumers.

So forecasts are ranging from the benign to the apocalyptic.

Some, like outgoing Finnish Finance Minister Alexander Stubb, compare Brexit to the 2008 collapse of U.S. investment bank Lehman Brothers, which spread financial ruin across the globe. Or, it could be more like Y2K, in which computers worldwide were supposed to fail on Jan. 1, 2000, because software was written for years beginning with 19-. In the event, not much happened.

Here's a quick runthrough of the global risks from a Brexit.

LOWER FOR LONGER Faced with churning markets, central banks could try to steady things with extra loans for banks or other ways of making credit more readily available. Market swings could help persuade the U.S. Federal Reserve to postpone interest rate increases once thought likely this year and now in doubt.

That could be good news for mortgage holders but could prolong savers' agony over low rates and non-existent returns on deposits.

FLIGHT TO SAFETY

MANAGEABLE?

It's reasonable to assume that a vote to leave would cause global financial market swings in the short term, with investors selling riskier assets such as

The direct impact of a Brexit would likely not be too bad on growth — if you're not British. A year after a vote to leave, Brit-

ain's economy would be one percent smaller than it would have been otherwise, while the 28-country EU would lose 0.25 percent and the world 0.1 percent, according to Moody's Analytics chief economist Mark Zandi.

"I think the immediate effect is modest," he said.

"It's not cataclysmic in any way. It's corrosive, certainly.

It diminishes the U.K. economy going forward."

Taking 0.1 percentage point off global growth might not seem like much, but the world economy, though not in crisis, is not in great shape right now.

The International Monetary Fund predicts 3.2 percent growth this year and 3.5 percent next year.

IMF head Christine Lagarde says that's not enough to lift living standards and get the globe's 200 million unemployed back to work.

"There is a risk that middle class families and the poor actually remain behind, which would embolden the voices of protectionism and fragmentation," she said in April.

The World Trade Organization says international trade will remain sluggish this year, growing 2.8 percent, well below the average

of 5 percent since 1990.

And the effects of a Brexit could be long-lasting: permanently lower growth in Britain and Europe. After five years, Britain's economy would be 4 percent smaller than otherwise; the EU 1 percent and the global economy 0.25 percent, according to Zandi.

So it could add up.

UNCERTAINTY The "U-word" is prominent in most assessments of Brexit. That's because it would take years for Britain to sort out new trade relationships if it leaves the EU, whose members trade freely with each other without charging tariffs.

Businesses wouldn't know where to locate production or how much it would cost to trade.

The EU and Canada, for instance, started negotiating a trade agreement seven years ago, but it still hasn't been ratified.

And uncertainty can be very hard on growth. It makes executives hold off on building new plants or hiring permanent employees, while consumers might wait on buying a new car or kitchen.

NOTICE

NOTICE is hereby given that ADDERLEY TANIS of Penny Saving Bank Lane, New Providence, Bahamas is applying to the Minister responsible for Nationality and Citizenship, for registration/ naturalization as a citizen of The Bahamas, and that any person who knows any reason why registration/naturalization should not be granted, should send a written and signed statement of the facts within twenty-eight days from the 13th day of June, 2016 to the Minister responsible for nationality and Citizenship, P.O. Box N-7147, Nassau, Bahamas.

MARKET REPORT FRIDAY, 17 JUNE 2016

t. 242.323.2330 | f. 242.323.2320 | www.bisxbahamas.com

BISX ALL SHARE INDEX: CLOSE 1,925.39 | CHG 0.94 | %CHG 0.05 | YTD 101.44 | YTD% 5.56 BISX LISTED & TRADED SECURITIES 52WK HI 3.30 17.43 9.09 3.50 4.70 0.18 8.34 8.25 5.84 10.60 15.50 2.57 1.60 5.80 7.55 11.00 7.40 6.90 12.25 11.00

52WK LOW 2.20 17.43 9.09 3.00 4.70 0.12 5.32 7.25 5.50 6.85 14.50 1.94 1.27 5.51 6.00 9.85 6.01 5.25 11.75 10.00

PREFERENCE SHARES 1000.00 1000.00 1000.00 1000.00

1000.00 1000.00 1000.00 1000.00

1.00 105.50 100.00 100.00 100.00 105.00 100.00 10.00 1.01

1.00 100.00 100.00 100.00 100.00 100.00 100.00 10.00 1.01

SECURITY AML Foods Limited APD Limited Bahamas Property Fund Bahamas Waste Bank of Bahamas Benchmark Cable Bahamas CIBC FirstCaribbean Bank Colina Holdings Commonwealth Bank Commonwealth Brewery Consolidated Water BDRs Doctor's Hospital Famguard Fidelity Bank Finco Focol ICD Utilities J. S. Johnson Premier Real Estate Cable Bahamas Series 6 Cable Bahamas Series 8 Cable Bahamas Series 9 Cable Bahamas Series 10 Colina Holdings Class A Commonwealth Bank Class E Commonwealth Bank Class J Commonwealth Bank Class K Commonwealth Bank Class L Commonwealth Bank Class M Commonwealth Bank Class N Fidelity Bank Class A Focol Class B

CORPORATE DEBT - (percentage pricing) 52WK HI 100.00 100.00 100.00

52WK LOW 100.00 100.00 100.00

SECURITY Fidelity Bank Note 17 (Series A) + Fidelity Bank Note 18 (Series E) + Fidelity Bank Note 22 (Series B) +

SYMBOL AML APD BPF BWL BOB BBL CAB CIB CHL CBL CBB CWCB DHS FAM FBB FIN FCL ICD JSJ PRE

LAST CLOSE 3.30 15.85 9.09 3.50 5.22 0.12 6.56 8.20 5.84 10.60 14.50 2.47 1.50 5.80 7.55 9.90 7.30 6.36 11.93 10.00

CLOSE 3.30 15.85 9.09 3.50 5.22 0.12 6.56 8.20 5.84 10.60 14.50 2.48 1.50 5.80 7.55 9.98 7.30 6.36 11.93 10.00

CHANGE 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.01 0.00 0.00 0.00 0.08 0.00 0.00 0.00 0.00

CAB6 CAB8 CAB9 CAB10 CHLA CBLE CBLJ CBLK CBLL CBLM CBLN FBBA FCLB

1000.00 1000.00 1000.00 1000.00 1.00 100.00 100.00 100.00 100.00 100.00 100.00 10.00 1.01

1000.00 1000.00 1000.00 1000.00 1.00 100.00 100.00 100.00 100.00 100.00 100.00 10.00 1.01

0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

SYMBOL FBB17 FBB18 FBB22

LAST SALE 100.00 100.00 100.00

CLOSE 100.00 100.00 100.00

CHANGE 0.00 0.00 0.00

113.95 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00

113.95 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00

0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

VOLUME

.

7,210

VOLUME

EPS$ 0.304 1.351 1.086 0.220 -1.134 0.000 0.185 0.551 0.508 0.541 0.528 0.094 0.166 0.510 0.612 0.960 0.650 0.703 0.756 0.000

DIV$ 0.090 1.000 0.000 0.160 0.000 0.000 0.187 0.260 0.200 0.360 0.610 0.060 0.040 0.240 0.275 0.000 0.280 0.120 0.640 0.000

P/E 10.9 11.7 8.4 15.9 N/M N/M 35.5 14.9 11.5 19.6 27.5 19.5 9.0 11.4 12.3 10.4 11.2 9.0 15.8 0.0

YIELD 2.73% 6.31% 0.00% 4.57% 0.00% 0.00% 2.85% 3.17% 3.42% 3.40% 4.21% 2.42% 2.67% 4.14% 3.64% 0.00% 3.84% 1.89% 5.36% 0.00%

0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000

0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

0.00% 0.00% 0.00% 0.00% 6.25% 6.25% 6.25% 6.25% 6.25% 6.25% 6.25% 7.00% 6.50%

INTEREST 7.00% 6.00% Prime + 1.75%

MATURITY 19-Oct-2017 31-May-2018 19-Oct-2022

6.95% 4.00% 4.00% 4.25% 4.25% 4.50% 4.50% 6.25% 6.25% 4.00% 4.25% 4.50% 6.25%

20-Nov-2029 15-Dec-2017 30-Jul-2018 16-Dec-2019 30-Jul-2020 15-Dec-2021 30-Jul-2022 15-Dec-2044 30-Jul-2045 26-Jun-2018 26-Jun-2020 26-Jun-2022 26-Jun-2045

BAHAMAS GOVERNMENT STOCK - (percentage pricing) 115.03 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00

113.70 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00

Bahamas Note 6.95 (2029) BGS: 2014-12-3Y BGS: 2015-1-3Y BGS: 2014-12-5Y BGS: 2015-1-5Y BGS: 2014-12-7Y BGS: 2015-1-7Y BGS: 2014-12-30Y BGS: 2015-1-30Y BGS: 2015-6-3Y BGS: 2015-6-5Y BGS: 2015-6-7Y BGS: 2015-6-30Y

BAH29 BG0103 BG0203 BG0105 BG0205 BG0107 BG0207 BG0130 BG0230 BG0303 BG0305 BG0307 BG0330

MUTUAL FUNDS 52WK HI 1.97 3.82 1.91 160.64 138.35 1.43 1.64 1.53 1.05 6.67 8.16 5.81 10.66 10.12

52WK LOW 1.67 3.04 1.68 164.74 116.70 1.37 1.51 1.45 1.03 6.11 6.93 5.55 10.37 8.65

FUND CFAL Bond Fund CFAL Balanced Fund CFAL Money Market Fund CFAL Global Bond Fund CFAL Global Equity Fund FG Financial Preferred Income Fund FG Financial Growth Fund FG Financial Diversified Fund FG Financial Global USD Bond Fund Royal Fidelity Bahamas Opportunities Fund - Secured Balanced Fund Royal Fidelity Bahamas Opportunities Fund - Targeted Equity Fund Royal Fidelity Bahamas Opportunities Fund - Prime Income Fund Royal Fidelity Bah Int'l Investment Fund Principal Protected TIGRS, Series 5 Royal Fidelity Int'l Fund - Equities Sub Fund

NAV 1.97 3.83 1.91 164.74 133.64 1.43 1.64 1.53 1.05 6.67 8.01 5.81 10.66 8.65

YTD% 12 MTH% 1.35% 4.06% 1.43% 6.57% 0.70% 3.23% 1.67% 5.13% 0.66% -3.41% 1.23% 3.88% 0.55% 8.17% 0.86% 5.37% 1.07% 1.61% -0.14% 9.15% -1.87% 15.62% 0.83% 4.82% 70.00% 2.80% -6.29% -13.65%

NAV Date 30-Apr-2016 30-Apr-2016 29-Apr-2016 31-Mar-2015 30-Sep-2015 30-Apr-2016 30-Apr-2016 30-Apr-2016 30-Apr-2016 29-Feb-2016 29-Feb-2016 29-Feb-2016 29-Feb-2016 29-Feb-2016

MARKET TERMS BISX ALL SHARE INDEX - 19 Dec 02 = 1,000.00 52wk-Hi - Highest closing price in last 52 weeks 52wk-Low - Lowest closing price in last 52 weeks Previous Close - Previous day's weighted price for daily volume Today's Close - Current day's weighted price for daily volume Change - Change in closing price from day to day Daily Vol. - Number of total shares traded today DIV $ - Dividends per share paid in the last 12 months P/E - Closing price divided by the last 12 month earnings

YIELD - last 12 month dividends divided by closing price Bid $ - Buying price of Colina and Fidelity Ask $ - Selling price of Colina and fidelity Last Price - Last traded over-the-counter price Weekly Vol. - Trading volume of the prior week EPS $ - A company's reported earnings per share for the last 12 mths NAV - Net Asset Value N/M - Not Meaningful

TO TRADE CALL: CFAL 242-502-7010 | ROYALFIDELITY 242-356-7764 | FG CAPITAL MARKETS 242-396-4000 | COLONIAL 242-502-7525 | LENO 242-396-3225

THE BVI BUSINESS COMPANIES ACT, 2004 P PEN FINANCE LTD. Incorporation No 1447669 (IN VOLUNTARY LIQUIDATION) We, being the Director of the Company, hereby confirm that:(1) the principal place of business of the Company is situated at Trident Chambers, P.O.Box 146, Road Town, Tortola, British Virgin Islands.

(2) the Company has not commenced business since the date of incorporation.

(3) the Company opened a bank account with Credit Suisse for the purpose of investing funds. The said bank account was closed on May 25, 2016 for the purpose of liquidating the Company.

(4) the Company has no assets, liabilities and creditors.

Octagon Management Limited Director

THE TRIBUNE

Monday, June 20, 2016, PAGE 9

Referendum gamble will define legacy of UK’s David Cameron LONDON (AP) — It's often said that David Cameron is a lucky politician who has seemed to coast through politics on instinct and charm during a career that has culminated in six years as British prime minister. But now his luck may be running out.

In calling a referendum on Britain's membership in the European Union, Cameron has made a gamble that could end his career — and take his country out of an international alliance it joined more than 40 years ago.

It would be a rare but fateful miscalculation for a politician who has a reputation for thriving under pressure and astutely judging political risks.

"I think he's actually been pretty stunned by the strength of the 'leave' cause," said Cameron biographer James Hanning.

"The golden rule is, never hold a referendum unless you're confident of winning it, and I think he thought that the moderate voices would prevail by some distance. But that's not the way the polls are suggesting it's going to go."

The referendum campaign has been unexpectedly bitter and divisive, and was brought to a shocked halt when Labour lawmaker Jo Cox was shot and stabbed to death in the street last week. The suspected killer gave his name in court as "death to traitors, freedom for Britain."

Both sides suspended campaigning until Sunday out of respect for Cox, amid fears that the political fury unleashed by the EU campaign was somehow connected to the killing.

Before Cox died, opinion polls had shown surging sentiment in favor of a British exit from the 28-nation

EU — known as Brexit. A majority of supporters of Cameron's Conservative Party said they would vote to quit the bloc in Thursday's referendum.

That's bitter news for Cameron, who called the referendum to puncture growing support for the anti-EU U.K. Independence Party and placate the strongly Euroskeptic right wing of the Conservatives.

Victoria Honeyman, a lecturer in British politics at the University of Leeds, said Cameron had seen EU battles poison the leaderships of former Tory leaders John Major and William Hague and "feared a civil war in the Conservative Party."

She said the referendum was about "defusing that time bomb" — but Cameron has "moved from having one ticking time bomb to having another ticking time bomb."

When he promised the referendum, in 2013, Cameron said it would "settle this European question in British politics" once and for all.

He told voters he would forge a new deal between Britain and the EU that would make remaining an attractive prospect. At a Brussels summit in February, he won changes to welfare benefits that he said would reduce immigration

and an exemption for Britain from the EU's commitment to "ever-closer union" — a phrase that stirs images of a European super-state in some patriotic British hearts.

But many voters have proved resistant to Cameron's message that Britain is stronger, safer and more economically secure within the EU than it would be outside it.

The concessions he gained have been dismissed as paltry by "leave" campaigners, who say they will do little to limit immigration from other EU nations because the bloc guarantees free movement among member states. It's a subject that resonates with many voters, who have seen hundreds of thousands of people come to Britain over the past decade from new EU members in eastern Europe. (Hundreds of thousands of Britons also live in other EU countries, a less remarked-upon fact).

"I think he has underestimated the enduring nature and the strength of the Euroskeptic support in the country and also the extent of the bitterness inside his own party," Hanning said.

Far from healing Conservative divisions over Europe, the referendum has exacerbated them. Cameron has led the "remain" campaign, but let Euroskeptic

NOTICE

NOTICE is hereby given that GINA CHRISTIAN of Carmichael Road, New Providence, Bahamas is applying to the Minister responsible for Nationality and Citizenship, for registration/ naturalization as a citizen of The Bahamas, and that any person who knows any reason why registration/naturalization should not be granted, should send a written and signed statement of the facts within twenty-eight days from the 13th day of June, 2016 to the Minister responsible for nationality and Citizenship, P.O. Box N-7147, Nassau, Bahamas.

BRITAIN’s Prime Minister David Cameron addresses members of a World Economic Forum event focusing on Britain’s EU referendum in London. In calling a referendum on Britain’s membership in the European Union, Cameron has made a gamble that could end his career _ and take his country out of an international alliance it joined more than 40 years ago. (AP Photo)