CLICO now owes the government $ 1.21 billion | Local company

Colonial Life Insurance Company (Trinidad) Ltd (CLICO) now owes the government $ 1.21 billion as part of its 2009 bailout.

It took 12 years for the debt to be reduced from $ 18 billion in 2009 to now $ 1.2 billion in 2021.

This is according to the 40th Quarterly Report of the Central Bank, which was filed with the High Court in accordance with Section 44E (7) of the Act, for the quarter ended September 30, 2021.

The report is an inventory of the restructuring proposals of CLICO, BAT and Clico Investment Bank (CIB)

Interest payments on preferred shares owed to the government have started. As at August 31, 2021, the residual interest owed to the government on these preferred shares was approximately $ 27.9 million. In summary, of the approximately $ 18 billion (including preferential interest owed) provided by the government to CLICO, approximately $ 16.78 billion was repaid by CLICO, leaving a balance of approximately $ 1.00. $ 21 billion as of September 30, 2021, ”according to the report.

The report noted that, in accordance with the directives of the Minister of Finance of July 13, 2016, the government received at least 15 payments, totaling $ 5 billion from CLICO between July 25, 2016 and October 30, 2020.

In March 2021, according to this quarterly report, the Central Bank declared that CLICO was now solvent and that it still owed the government $ 2.09 billion as part of its bailout.

In May 2021, a ministerial directive was given to the Central Bank to release $ 400 million to the state.

At that time, the Central Bank said: “As of May 31, 2021, CLICO’s outstanding debt to the Government of Trinidad and Tobago was approximately $ 1.6 billion.

“In accordance with a ministerial instruction, CLICO was ordered on September 21, 2021 to pay GORTT approximately $ 380 million in cash in return for an appropriate reduction of debts owed to GORTT in order of priority. Payments were made on September 30, 2021, ”the latest report says.

“Over the period July 25, 2016 to August 31, 2021, approximately $ 486.2 million (balance of 15% or, where applicable, 100% of contractual liability plus interest) and $ 1,155 million were paid to 757 holders of CLICO STIP and 34 mutual funds. holders, respectively of the total value to be paid. The balance of money owed to this group is available for payment as and when the people involved make the appropriate requests, ”he said.

CLICO has been under the control of the Central Bank since 2009, in accordance with Article 44D of the Central Bank Law.

In an interview earlier this year, central bank governor Dr Alvin Hilaire said he was impatient for T & T’s financial institutions regulator to close the book on this country’s biggest bailout.

“Like I told you before, we want to get out of this business yesterday, don’t we?” We are not running insurance companies. Most of the conditions no longer exist with respect to the systemic problem. And in terms of the health of the financial system, we therefore do not have a systemic problem, ”he said.

The sale of the traditional CLICO portfolio to Sagicor remains blocked following an injunction granted to Maritime Life (Caribbean) Ltd in July 2020.

CLICO’s 2020 financial statements noted: “The long-term insurance and investment contract liabilities represented on the company’s balance sheet amounting to $ 7.7 billion constitute an appropriate provision for future obligations under company policies and meet the requirements of the law and any other regulations made under it.

Ministerial directives

Although CLICO is under the management of the Central Bank, the report notes that a number of transfers were made in accordance with a ministerial directive during the management of CLICO by the Central Bank.

These directives are authorized under Article 44F (5) of the Central Bank Law, which states: “In the exercise of its functions and in the exercise of its powers under Article 44D, the Bank shall comply with any general or special instructions of the Minister and act only after having duly consulted the Minister.

Among them recorded in the court document:

• In January 2017, in view of the unforeseen delay in the sale of MHIL shares and in accordance with the instructions of the Minister of Finance to the Central Bank, CLICO obtained an independent valuation of CLICO’s 100% stake in Occidental Investment Limited (OIL ) and Oceanic Properties Limited (OPL) with a view to transferring these holdings to the government, thereby appropriately reducing CLICO’s obligations to the government. The valuation report was completed and the share purchase and sale agreement signed by the parties on March 28, 2017. On May 8, 2017, the parties signed the necessary share transfer forms to facilitate the transfer of CLICO’s 100% stake in OIL and OPL. to the state-owned company, Golden Grove-Buccoo Ltd.

• On April 11, 2018, approximately $ 107 million of a WASA loan facility as well as a cash payment of $ 21 million was effectively transferred to the government for an appropriate reduction of debts owed by CLICO to the government by order of priority.

• In accordance with the instructions of the Minister of Finance, agreements were signed on March 29, 2018 for the transfer of approximately 21% of the shares of CLICO into One Caribbean Media Ltd (OCM) and of approximately 5% of the shares of West Indian Tobacco Company Ltd to the Government company on the basis of an independent valuation, in return for an appropriate reduction of debts owed by CLICO to the Government in order of priority. These shares were transferred on April 25, 2018.

• On April 30, 2018, CLICO received from the liquidator of CIB, the Deposit Insurance Corporation, an interim distribution of 27,619,219 Republic Bank Ltd (RBL) shares and 848,564 OCM shares. In accordance with the instructions of the Minister of Finance, the Central Bank ordered CLICO to transfer to the State the RBL shares and the OCM shares on the basis of the price determined by an independent valuation in return for an appropriate reduction of the debts due to the state in order to priority. These shares were transferred to the government on July 4, 2018.

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