business@tribunemedia.net
WEDNESDAY, NOVEMBER 22, 2023
$6.05
$6.11
$6.01
$6.07
Aliv ‘set for success’ with $55m refinance t $BCMF (PW U BHSFF PO SFTUSVDUVSJOH NPCJMF PQFSBUPS T EFCU t %FCU GPS FRVJUZ DPOWFSTJPO JOWPMWFT AQSFUUZ IFGUZ OVNCFST t -PXFS GBDJMJUJFT GFFT BOE JOUFSFTU DVU PO N PXOFS MPBO
By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net CABLE Bahamas’ top executive yesterday asserted that an “up to” $55m refinancing package agreed with the Government will “set up Aliv for future success”. Franklyn Butler, the BISXlisted communications provider’s executive vice-chairman, president and chief executive, told Tribune Business that the deal - which includes a “pretty hefty” debt-for-equity swap - will “fundamentally strengthen the balance sheet” of The Bahamas’ second mobile operator while also reducing its operational spending. The refinancing terms, which were revealed in the footnotes Cable Bahamas’ just-released
2023 annual report, commit Cable Bahamas and the Government to inject up to a combined $55.129m into Aliv. Their contributions will be equivalent to their current shareholdings in the mobile operator, meaning that the Government - as owner of a 51.75 percent stake - will provide the majority. Its financing will be provided via HoldingCo, which holds the Government’s majority interest. Cable Bahamas owns the remaining 48.25 percent, but has Board and management control, and the Aliv refinancing also alters the interest rate, associated calculations and repayment schedules on the BISX-listed provider’s roughly $70m “shareholder loan” to the mobile operator.
Mr Butler effecand data centres. tively described the This, in turn, will cut deal as a ‘win-win’ for the mobile operator’s both Cable Bahamas operating expenses. and Aliv. While the “On October 31, latter will enjoy a more 2023, the company robust balance sheet, [Cable Bahamas] reduced debt and executed a deed of lower associated intercontribution whereby est costs, he explained the company and that Cable Bahamas’ FRANKLYN BUTLER HoldingCo in their cash flow should also capacity as shareholdbenefit as the mobile ers of Aliv collectively operator starts to pay the “accrued interest” on that agreed to contribute additional capital into Aliv and restrucshareholder loan. The refinancing deal, which was ture its existing debt obligations executed on October 31, 2023, to optimise its capital structure after Cable Bahamas’ end-June and enhance financial flexibility,” financial year close, also reduces Cable Bahamas told shareholders the fees paid by Aliv to its con- in its annual report. trolling shareholder for use of the latter’s facilities including towers SEE PAGE B6
Gov’t ready to ‘step to plate’ and buy GBPA Deal’s ‘equal By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net THE Government has been negotiating to acquire the Grand Bahama Port Authority (GBPA) for months with the Prime Minister yesterday confirming it is “willing to step to the plate” and agree a deal itself. Philip Davis KC, speaking as the Cabinet met in Grand Bahama yesterday, said the Government had informed the existing owners of Freeport’s quasigovernmental authority - the Hayward and St George families - that it is prepared to acquire the GBPA and its affiliated assets if no suitable private investor or buyer emerges. Asked to confirm if the GBPA might be sold, and the Government acquire it, the Prime Minister replied: “If it’s going to be sold, it requires government
approval, and we’ll approve any agreement for the sale of the Port Authority once it’s going to align with the benefits we have identified that could be had by Grand Bahamians and The Bahamas in particular. “And the Government itself is willing to step to the plate to acquire the Port, and we’ve made that known to the families as well.” Mr Davis’ comments reaffirm what multiple sources have been telling Tribune Business for some time, namely that the Government has been speaking to both the St George and Hayward families, and their representatives, about its willingness to acquire the GBPA for months. This newspaper was told the St George estate is united in its willingness to exit, and sell, their 50 percent interest in the GBPA and its Port Group Ltd if
PHILIP DAVIS KC the terms and price are right. However, the intentions of the Hayward side are understood to be less clear. The Sir Jack Hayward 1993 Discretionary Settlement, which is the trust that holds the family’s 50 percent GBPA interest, is currently under the control of Supreme Courtappointed judicial trustees. These are Paul Winder, an expatriate banker with Lyford Cay-based Deltec
Bank & Trust, and Rhone Trustees. It is understood that the judicial trustees have requested that one of the ‘Big Four’ accounting firms conduct a valuation of the GBPA and Port Group Ltd assets, and their worth, to determine a reasonable purchase price that could stand up to future challenge. More than one source has suggested talks with the Government have focused on a price in the $150m-$175m range for the entire concern. Other contacts, though, have scoffed at such figures and suggested it was both highly unlikely that the Hayward family will sell or that the Government would buy-out the St Georges and settle for becoming its 50/50 partner. It was also suggested that no formal offer has been
SEE PAGE B5
Melia site set for $500m outlay on 600-room hotel By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net THE Prime Minister yesterday revealed that Baha Mar’s owner plans to invest up to $500m in developing a new 600-room resort on the site of the old Melia Nassau Beach hotel. Philip Davis KC, when asked to respond to Opposition charges that the multiple new tourism, airport and infrastructure projects just unveiled for Bimini and West Grand Bahama are designed to help win today’s
by-election in the constituency, recalled how the Free National Movement (FNM) branded Baha Mar’s opening just prior to the 2017 general election as “fake”. “It’s not unlike when they said Baha Mar would never open,” the Prime Minister recalled. “When it opened, it was a ‘fake opening’. Now look at what is happening, It’s flourishing. It is flourishing. “Now, again, under my watch, they’re about to invest another $400m to $500m to develop another 600-room hotel having now taken down the old Melia
MELIA NASSAU BEACH HOTEL hotel.” No details were provided on the number of construction and full-time jobs likely to be created. Baha Mar and its owner, Chow Tai Fook Enterprises (Bahamas), have yet to formally announce what their plans are for the oceanfront Cable Beach site now freed up by the Melia tear-down. However, Mr Davis’ description is not that
different from what Dion Bethell, Arawak Port Development Company’s (APD) president and chief financial officer, told Tribune Business of the post-Melia vision. “There’s some demolition going on there, and they’re forecast to develop rooms and residences. They’re expected to put up 400 rooms and 60
SEE PAGE B8
Commonwealth cuts loan delinquency by up to 5% By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net COMMONWEALTH Bank says non-performing loans have reduced by between 1-5 percent across all credit segments since year-end 2022 as its portfolio expands faster than market growth. Tangela Albury, the BISX-listed lender’s vice-president and chief financial officer, told Tribune Business in written replies to this newspaper’s questions that the Bahamian “low interest rate
environment” meant the bank has to control interest expense to maintain its margins. Commonwealth’s net interest income grew by 20 percent year-over-year for the first nine months of 2023, rising by $15m from $76.414m to $91.515m, which it attributed to “to strategic management of the bank’s investments and improvement in the quality of loan assets”. Ms Albury added: “Our objective is to maintain positive growth in net interest income through continued control of
interest expense, given that we continue to operate in a low-interest rate domestic business environment. “Specifically, the key factors driving the increase in net interest income have been improvement in the asset quality of the loan book, as well as loan growth, coupled with a revision to our approach to investing the bank’s excess liquidity. “We have seen a growth in loan receivables of 2 percent, year-on-year. This is noted against the Central Bank’s quarterly statistics as of September
reflecting a year-on-year market growth of 0.7 percent. Exceeding market growth has translated into increased interest income as we also aggressively manage our delinquency levels.” Commonwealth Bank’s net loan book grew to $801.983m at end-September 2023 from $786.245m at year-end 2022. As for credit quality, Ms Albury added: “Across the bank’s loan segments, we have seen the non-performing loans reduce between 1
SEE PAGE B8
treatment’ for 53k FTX Bahamas claims t -PDBM MJRVJEBUPST JO ABEWBODFE 3BZ TFUUMFNFOU UBMLT t A1PPMJOH QMBO BT ADPNNJOHMJOH JNQPTTJCMF UP VOSBWFM t "HSFFNFOU XPVME FOE '59 #BIBNBT CO DMBJN By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
FTX’s Bahamian liquidators “are in the advanced stages” of negotiating a “global settlement” with their US counterpart that will ensure equal treatment for their near-53,000 creditors. Brian Simms KC, the Lennox Paton senior partner, and PricewaterhouseCoopers (PwC) accounting duo, Kevin Cambridge and Peter Greaves, in their third report to the Supreme Court revealed that talks with John Ray, US head of the 134 FTX entities in Chapter 11 bankruptcy protection, were focusing on the creation of a “pooling mechanism” as the best process for returning assets to the crypto exchange’s victims. Affirming their desire to avoid renewed battles with Mr Ray, which would further slash investor/creditor recoveries through the imposition of extra legal costs and delays, the trio
BRIAN SIMMS KC said “pooling” represents the best solution given that the Bahamian and US liquidation estates’ respective assets and liabilities “are so commingled that it is difficult or impossible to unravel” or separate them. The recently-upgraded official liquidators for FTX Digital Markets, the failed crypto exchange’s Bahamian subsidiary, said talks to resolve their differences and disputes with Mr Ray have been ongoing since September and they “hope to be in a position to recommend to the Supreme Court of The Bahamas that this global settlement is entered into”.
SEE PAGE B4