Imbert: NIF for the people

FINANCE Minister Colm Imbert yesterday gave the assurance that the assets of the National Investment Fund (NIF), “will not be sold, given away or otherwise auctioned-off to wealthy individuals.”

He said so when he opened debate on the Corporation Tax Amendment Bill 2018 in the House of Representatives. The objective of the bill was to exempt the profits of the NIF Holding Company Ltd (NIFHCL) from income tax.

Imbert said he hoped his statement will put an end to speculation that the NIF’s assets would be given away, “to friends and investors. “These valuable assets will always remain the property of the State.” He reminded MPs the creation of the NIF is connected to Government injecting $23 billion into the Clico/CL Financial (CLF) bailout. Recalling that Government only recovered $7 billion of this money last year and went to court to recover the in excess of $15 billion that was outstanding.

As a result, Imbert continued, the NIFHCL was established as “a vehicle for monetising the assets transferred to the Government by CLF and its subsidiaries.” The NIF’s assets include the Clico/CLF share in Republic Limited, One Caribbean Media (OCM), Angostura Holdings Limited and West Indian Tobacco Company Limited (Witco). Imbert said, “It was also decided, that in order to further diversify the portfolio of the NIFHCL, certain shares, held by the Government in Trinidad Generation Unlimited (TGU) would be included in the NIFHCL portfolio.”

He said it is estimated that approximately $4 billion could be generated through monetisation of the assets in NIFHCL’s portfolio.

“The objective is to facilitate the participation of a wide cross-section of the citizens of TT in the benefits of the stream of income from the capital market and at the same time deepen and widen that market.”

Since public resources were used to restructure Clico and Clico Investment Bank (CIB), Imbert said, “It is our position that citizens of TT must benefit from the monetisation of the debt repayment.” Imbert said 42,475,362 shares of Republic Limited and 1,305,000 shares of OCM have been transferred from CIB, “to the Government and/or Government owned or controlled companies.”

He also said 61,677,011 shares of Angostura Limited, 13,980,917 shares of One Caribbean Media and 4,548,712 shares of WITCO were transferred from Clico to the Government. These transactions have been, or will be, executed by transferring the shares of Republic Limited, Witco, Angostura Limited and OCM by way of put-through transactions on the TT Stock Exchange (TTSE).

A fee of 0.3 per cent was paid to the TTSE and separate brokerage fees on both the transferor and transferee sides were incurred. Imbert said, “The values of the shares were determined through stock market valuations.” He said asset backed corporate bonds will be offered to the population between July 11 to August 8, “consistent with the Government yield curve, with a suitable uplift.”

The first tranche of five-year bonds will attract 4.5 per cent interest. The second tranche of 12-year bonds have a 5.7 per cent interest rate. The final tranche of 20-year bonds have a 6.6 per cent interest rate. Imbert reiterated that the assets of the NIFHCL, “will be used to generate the necessary income to pay the interest due annually on the bonds and to redeem the bonds when they become due in the five year, 12 year and 20 year period.”

Imbert said it is Government’s intention in due course to transfer the shares of Republic Limited, Angostura Limited, OCM, WITCO and TGU to NIFHCL and in return, receive a note amounting to the value of $7.915 billion, He explained $3.915 billion of this would be converted to ordinary shares and held by Government as sole shareholder of NIFHCL. The residual $4 billion would be re-paid to Government upon the receipt of the proceeds from asset-backed corporate bonds issued to the public in order to repay the $4.0 billion promissory note/loan note owed to the Government, Imbert added.