(Trinidad Express) Central Bank Governor Jwala Rambarran has announced the repayment of TT$7 billion to government by CLICO, in addition to the pay-out of TT$950 million to CLICO policy holders. Rambarran spoke at a press briefing at the Central Bank headquarters in Port of Spain yesterday.
HIGHLIGHTS OF THE
CLICO Resolution Plan
- Government, as the single largest creditor of CLICO, will receive TT4 billion dollars in cash today, and the balance of around TT3 billion in lieu of cash upon the transfer of three CLICO assets, Angostura Holdings Limited, CL World Brands Limited and Home Construction Limited.
- The 1500 non-assenting STIPs policyholders will receive 85 per cent of their claim or about TT950 million dollars in 3 months, and the remaining balance after the sale of Methanol Holdings International Limited.
- Creditors outside of the Statutory Fund such as non-Government mutual fund holders and non-residential Short Term Investment Products policyholders will be paid following the sale of CLICO’s RBL shares and other assets.
- The policyholders who accepted Government’s offer of bonds and shares in the CLICO Investment Fund will be no worse off. The Minister of Finance and the Economy will provide details shortly on how these policyholders will be treated.
- The claims of BAT policyholders will also be settled.
The following is part of Rambarran’s statement
Today is a significant day in the painful story that was the CLICO financial crisis.
For CLICO creditors and policyholders the end of this traumatic experience is finally drawing near.
Today, six years after CLICO collapsed, the company is in a position to make its first payment of just over 7 billion dollars to its single largest creditor: the Government of Trinidad and Tobago. This represents more than 40 per cent of CLICO’s debt to Government.
Today is also a turning point for the thousands of policyholders, who’ve endured unimaginable hurt and pain as a result of the CLICO crisis. CLICO is also in a position to pay out about 950 million dollars to policyholders. These two creditors are receiving an equal 85 per cent payout at this stage.
These two payments are being made according to the terms of the CLICO Resolution Plan developed by Central Bank and finalized last week Monday after consultation with the Minister of Finance and the Economy as required under Section 44F of the Central Bank Act. Central Bank’s CLICO Resolution Plan was developed to repay all creditors and policyholders and to ultimately facilitate the transfer of CLICO’s traditional insurance portfolio to a suitable buyer by ensuring that enough appropriate assets are put aside.
They say timing is everything…and the question for many is why start these payments now? The answer is: CLICO is now in a position to make payments to its creditors in order to advance the resolution of the company. CLICO’s ability to meet its obligations to creditors and policyholders is based on its most recent Management Accounts as at December 2014 and our up to date understanding of CLICO’s Statutory Fund position.
These numbers indicate CLICO now has sufficient assets to pay its liabilities in its Statutory Fund. The improvement in CLICO’s Statutory Fund position resulted mainly from the sale of CLICO’s shareholding in Methanol Holdings Trinidad Limited (MHTL) in October 2014. This sale added just over 7 billion dollars of cash to CLICO’s Statutory Fund. The
bottom line is, the sale of the MHTL asset injected the funds needed to move CLICO’s resolution forward and to help define our resolution plan.
