Monday, February 19, 2018

Howai: $1.8b more for CLICO bailout

A further $1.8 billion may be added to the $20.8 billion bailout bill for collapsed insurance giant CLICO, Finance Minister Larry Howai said yesterday.

This relates to settlement of a court judgement with respect to CLICO customers who had executive flexible premium annuities (EFPAs).

He was responding to questions during the Senate sitting on the resolution of matters surrounding CL Financial, the parent company of CLICO.

Howai said $20.8 billion was injected into the local conglomerate to preserve the stability and economy of the country.

Government is putting arrangements in place to reclaim this money and was currently in discussions with CL Financial on this.

He noted that CLICO and British American Insurance Company were under the control of the Central Bank.

He said CLICO Investment Bank was subject to liquidation proceedings and therefore under the control of a court- appointed liquidator.

Howai said the arbitration proceedings with respect to another CL subsidiary, Methanol Holdings, were ongoing and expected to be completed by the end of July.

This arbitration will account for two thirds of the value of the money advanced by the State.

In the interim, Howai said Government was in the process of completing general terms and conditions of the agreement for repayment of EFPAs which should be done by the end of June.

He said the next major asset of CL Financial was its $4 billion in shares of Republic Bank which will also be utlised to assist in reclaiming the billions of dollars injected into the failed conglomerate.