Caribbean Business And Finance Report

Compiled By NAN Business Editor

News Americas, NEW YORK, NY, Fri. Aug. 21, 2020: Here are some of the top business and finance news making headlines across the Caribbean this week.

Regional

Regional company Grace Kennedy Remittance Services (GKRS), which operates Western Union and Bill Express Services, has been ordered to pay G$377,135,184 (USD 1,807,536.90) to the Guyana Revenue Authority (GRA).

In a ruling delivered by Justices Navindra Singh and Diana Insanally, the Court found that GRA was lawfully recouping corporation taxes from GKRS from which it could not be estopped.

In May 2018, GRA informed GKRS that it had been reclassified as a commercial company, and therefore additional assessments were raised for the years 2011-2017 with respect to its liability for corporation tax.

This resulted in the company having tax liability for those said years in the sum of $377,135,184. However, GKRS objected to the reclassification and the additional assessments and sued the GRA but lost. It then appealed to the Full Court and this week lost as well.

Meanwhile, Sagicor Group’s second quarterly financials were hit hard by unrealised capital losses as well as expected credit losses amounting to millions of dollars, due mainly to the downturn in the economy caused by COVID-19.

In spite of this, the financial group was able to generate net profit attributable to stockholders of $2.47 billion, which is a significant improvement when compared to the $1.88 billion net profit attributable to stockholders at the end of the first quarter of 2020.

For the six-month period, January to June 2020, profits were $4.36 billion, which was a very creditable performance, especially with the second quarter being the height of the COVID-19 lockdown in the countries in which Sagicor operates.

The unrealised capital losses of $5 billion were driven by the broad decline in bond and equity prices.

Guyana

The United Kingdom-based, anti-corruption organization, Global Witness, this week called on the new Guyana government to immediately investigate and renegotiate the US-owned oil giant Exxon’s exploitative oil license to ensure the country has the funds needed to rebuild after divisive elections and a debilitating novel coronavirus pandemic.

In a statement, Global Witness said that in February 2020 its exposé ‘Signed Away’ revealed that Guyana could lose billions of US dollars from a 2016 Exxon oil deal, according to a report by the financial analyst firm OpenOil which it had commissioned.

“With Exxon increasingly dependent upon an immense Guyanese oil find, President Irfaan Ali has a remarkable opportunity to make a new deal, while showing the interests of all Guyanese – not Exxon – are at the heart of his Administration,” said Jonathan Gant, senior campaigner at Global Witness.

The call comes as the new Irfaan Al administration named former Alberta Premier Alison Redford to a team of consultants who will reviewoil giant Exxon Mobil’s proposed Payara oil well in the South American country of Guyana.

And as Vice President of the World Bank Group, Latin America and the Caribbean, Carlos Felipe Jaramillo, congratulated President Ali and his new government and offered the Bank’s support to Guyana in addressing various development challenges, including the economic impact on the country due to the COVID-19 pandemic.

Jamaica

Fluor Corporation FLR has divested all the assets of AMECO Caribbean, Inc. to Stewart’s Automotive Group in Jamaica, which marks its initial breakthrough of accomplishing the ongoing strategy to focus on the company’s core markets. It sold the business for $22 million.

Stewart’s Automotive Managing Director Duncan Stewart said the acquisition has been over one year in the making since Stewart’s approached Ameco with a takeover proposal. “We approached them to ask if they were willing to sell and they agreed. Subsequent to that they said they wanted to sell the worldwide operation. I would say we were fortunate with our timing,” Stewart told the Jamaica Gleaner.

Turks & Caicos

Dellis Cay, the private island in the Turks & Caicos which was on the market for $42 million, is finally under offer.

A billion-dollar fund recently made a deposit on the stalled development and the 90-day due diligence starts on September 3rd, 2020 when British Airways resumes flights to the Turks and Caicos Islands.The TCI SUN reports the company is Inn Vogue Hotel Group which has a $1 Billion fund to buy up distressed hotels and properties globally.

The four persons behind buying Dellis Cay are Paul Clarke, Simon Tolan, Raymond Jackson and Rob Fitzpatrick, all very successful businessmen.They plan to build two hotels on the property with 105 rooms, 80 luxury villas, finishing off the partially built villas,  68 condominiums, a marina, townhouses and retail units.

Curacao

A fuel oil cargo stuck off of the Dutch Caribbean island of Curacao is about to be released to an unnamed buyer in a closely monitored transaction that highlights maritime sensitivity to US sanctions on Venezuela.

The Liberia-flagged Panamax Promoter loaded the cargo early this month at Curacao’s Bullen Bay, shipping data indicate. Curacao’s Bullen Bay terminal and the 335,000 b/d Isla refinery had been operated by Venezuelan state-owned PdV under a long-term lease that expired in December 2019, when the assets reverted to Curacao’s state-owned RdK.

The fuel oil cargo belongs to Engineering and Training Kwisolutions, a Curacao-registered unit of PdV’s former local subsidiary Refineria Isla that is now seeking to complete the sale of the cargo. The revenue from the transaction is earmarked to pay the local debts that PdV left behind, including severance payments to labor unions and payments for industrial services from Curacao-owned utility CRU.

According to officials close to the deal, the sale is “fully compliant” with Curacao’s license from the US Treasury Department’s Office of Foreign Assets Control, which administers the sanctions on Venezuela.

Eastern Caribbean

The International Finance Corporation (IFC), member of the World Bank Group, and the Eastern Caribbean Central Bank (ECCB), have signed a Memorandum of Understanding (MOU), that aims to expand access to finance for small and medium sized enterprises (SMEs) in the Eastern Caribbean Currency Union (ECCU), through a Secured Transactions Collateral Registry Program.

Through the MOU, the IFC and the ECCB will establish the groundwork for a common legal framework that will allow small and medium-sized business owners throughout the ECCU to use movable assets as collateral when seeking finance. These include machinery, crops or accounts receivables.

The objective is to create a centralized, shared registry in the region, following international standards established by the United Nations Commission on International Trade Law (UNCITRAL), that can be customized to each country’s particular case.

Puerto Rico

The FBI this week arrested Puerto Rican lawmaker, María Milagros “Tata” Charbonier, a representative-at-large for the New Progressive Party (NPP.) Also arrested were three other people, including her husband, Orlando Montes, and son Orlando Gabriel Montes-Charbonier, for participating in an illegal kickback scheme in which the Puerto Rico lawmaker allegedly stole $100,000 in state funds.

As detailed in a grand jury indictment, filed Aug. 7, Charbonier illegally inflated the salary of one of her employees, Frances Acevedo, by $2,900 a month, under the condition that she pay a commission of $1,000 to $1,500 a month to Charbonier, her husband and adult son.

In all, the indictment lists 13 charges ranging from theft of public funds, bribery and kickbacks to honest services wire fraud, money laundering and conspiracy.

Cayman Islands

The Cayman Islands economy is expected to contract by 7.2% this year before recovering partially with a 6.4% expansion in 2021. Finance Minister Roy McTaggart presented government’s latest economic estimates at last week’s Economic Forum, hosted online by the Chamber of Commerce. So far hotels and restaurants are bearing the brunt of the lockdown measures and the resulting absence of tourism with a projected 74.6% decline this year.

Saint Lucia

Saint Lucia Prime Minister, Allen Chastanet, has lauded the region for its general quick response to the pandemic, the management of the pandemic so far on CNBC.

“We believe we have found the right balance between opening up the doors while at the same time protecting the safety of the guests who are coming as well as our nationals in our country,” Prime Minister Chastanet said during the interview on Wednesday, August 12 on CNBC’s Power Lunch, hosted by Tyler Mathisen, Melissa Lee and Kelly Evans.