CLICO’s gargantuan office building at Lots 200-201 Camp Street has been sold to the National Insurance Scheme (NIS) for $600M.
According to documents seen by Stabroek News the transaction was completed on September 1st, 2011 by Lawrence Williams, the liquidator of CLICO Life and General Insurance Company (South America) Limited who is also the Governor of the Central Bank.
The sale may raise eyebrows as the huge ill-fated building was said to have carried a higher valuation than $600M.
When the liquidation of CLICO was being deliberated on before the court a valuation by Nizam Ali and Company had stated that as a going concern the building would be valued at $1.5B and $1.12B at the best case scenario and $751M at the worst case scenario.
Essentially, sources say that the NIS would have gotten it below market value. However, this would only be of material consequence if the scheme was able to transform it into a productive asset or flip it at a much higher value. However, sources note that the real estate market is saturated and buildings of that sprawling nature are not in demand.
Further, the sources point out that the ownership of the building could be a significant drag on the cash-strapped NIS as maintenance and security of a building of that size could be exorbitant.
The NIS is already owed in excess of $5B by CLICO for 13 Executive Flexible Premium Annuity Policies and it remains unclear how the Scheme will be able to recover this. The sale of the building to NIS would then essentially be an offset against the amount owed to the NIS.
The 200-201 Camp Street building has never been gainfully occupied.
It was once earmarked to be the head office of the Guyana Sugar Corporation and the superstructure for this was erected but it was left like this for many years. CLICO eventually purchased the property and set about building the massive structure which was intended to be its head office and to house other entities.
It however went bust in 2009 after its parent company in Trinidad had to be bailed out by the Port-of-Spain government.
The passing of the transport of the building to the NIS has already been advertised.
With CLICO’s liabilities far exceeding its assets and many of its pension and other plans still to retrieve their funds from the insurance company, sources say the sale of the building below the presumed market value may also be of concern to unions and others still to recover from CLICO.
By order by Justice Ian Chang dated September 24th, 2010, CLICO was ordered wound up and Williams was appointed liquidator. The company has other buildings and assets which are to be disposed of.
