Liquidators withdraw $ 9 million from CL Financial | Local company

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SINCE their appointment four years ago, the co-liquidators (JL) in charge of CL Financial (CLF), Hugh Dickson and David Holukoff of the international accounting firm Grant Thornton have submitted claims for payment of fees and expenses totaling over of $ 61.8 million ($ 9.11 million). .

Grant Thornton was appointed provisional liquidator of CL Financial, following a request by Finance Minister Colm Imbert for the liquidation of the group, which was once the largest indigenous company in Trinidad and Tobago.

In the seventh report to the court, dated December 18, 2020 and signed by Holukoff, the liquidators said that until October 2020, the JLs had collected fees totaling US $ 8,318,856 ($ 56,441,635).

But payments to Grant Thornton include honoraria of $ 2,494,513 for the period of their appointment as provisional liquidators – July through September 2017 – while in liquidator expenses there is a sum of $ 2,921,553. .

In total, for the period July 2017 to October 2020, Grant Thornton billed the government a total of $ 61,827,701, which equates to approximately 55% of the $ 112,976,056 identified as payments by the liquidators. CWF’s second largest expense during the period was legal fees, which totaled $ 18,751,897.

The liquidators also sit on several boards of the conglomerate.

In their report, they noted that the fees earned are a discounted amount.

“From the date of our appointment of September 15, 2017 to October 31, 2020, the JL charged a total fee of US $ 8,318,856 after an applied discount of US $ 3,722,043 and expenses of US $ 431,866.16” , indicates the report.

According to the report, CL Financial, the liquidating conglomerate, has cash of $ 237 million as of October 31, 2020.

The report noted that substantial value was received by CL Financial during the week of preparation of the report, which will bring its cash to $ 374 million, of which $ 88 million will remain reserved within the company upon determination. of a current trust deed. .

It sold assets held directly and indirectly by CL Financial for an amount of $ 140 million for the period under review.

CLF received $ 152 million in dividends for the six-month period: $ 142 million from CL World Brands (CLWB) and $ 10 million from Caribbean Petrochemical Manufacturing Ltd.

Updates

Some updates to the report include:

1. The cession of HCL land

The liquidators put over 3,000 acres of land up for sale on the open market.

He noted that the Covid-19 pandemic affected its initial commercialization process, but it launched a “full commercialization process for the first tranche of the land bank’s assets on July 1, 2020”.

“The management of HCL and the team of co-liquidators worked closely with the brokers for a period of three months to maximize the outcome of the commercialization process and respond to a large number of inquiries from potential buyers regarding the land. available. The process ultimately garnered substantial public interest, with 73 bids received and bids accepted worth $ 116 million.

“Since the process closed, the co-liquidators have overseen the execution of four sale and purchase agreements totaling $ 43 million, with deposits in hand, which are expected to end within three months. this report. All signed agreements were equal to or better than the independent valuation obtained by the co-liquidators.

“Negotiations are still underway on four additional lots whose transactions have been delayed at the request of potential buyers; the JLs and the HCL sub-group will take all appropriate measures to secure these sales as soon as possible. The JL note that business transactions during the pandemic are not straightforward and therefore work constructively with interested parties to strike deals, ”the report said.

He noted that since the court’s approval, 11 formal notices of “Land which may be acquired for public use” have been filed in the Trinidad and Tobago Gazette for land belonging to the HCL sub-group.

“Four of these notices were filed after the launch of the commercialization process of the first tranche of the land reserve and resulted in the removal of the applicable lots from the public process, even though substantial offers had been received on these lots and amounts spent. to market them. The eleven lots will be excluded from any other marketing process and will be subject to a compulsory acquisition process which remains in progress at the state of this report, ”he said.

The report says the remaining land reserve will be brought to market this year through a public process “which is consistent with that originally approved by the court order.”

2. The sale of Agostini shares

The report notes that JL oversaw the sale of HCL’s 50% stake in Agostini’s Ltd, which brought it $ 39 million in mid-March 2020.

JL said, “The proceeds of the sale were obtained at a critical time during the peak of the pandemic and provide essential assistance to the group in meeting its working capital and debt service obligations. “

“On the advice of independent brokers overseeing the transaction, 50% of the shares held by HCL for remarketing later in 2020 due to lack of liquidity in the market at the height of the pandemic. Independent brokers have been monitoring market liquidity for the six months preceding this report, with a view to identifying an appropriate opportunity to sell the shares. Following the broker’s advice, a further sale of 50,000 shares was completed in November 2020 at a market value of $ 1.2 million. These funds will be used to repay the secured creditor of HCL in accordance with the agreement with them.

“Although expressions of interest have been received for the remaining shares, the values ​​shown do not correspond to the current market value and as such have not been pursued by HCL. JLs and HCL management remain open to offers for stocks that reflect the current market value, and will ensure that any appropriate opportunity to release value from the remaining stake is realized in 2021, ”the report said.

For the fiscal year ended September 30, 2020, HCL was listed as holding 1,925,291 Agostini’s Ltd. shares.

3. The participation of CLICO in

Oman-based methanol company, MHIL

The JLs completed their review of a trust purportedly in favor of CLICO’s beneficial ownership of the company’s stake in MHIL and filed a court application for guidance on the validity of the trust on June 17, 2020 , the case before the High Court of Justice on August 12, 2020.

On August 26, 2020, this declaration of trust was ordered to be validly executed and the MHIL shares were not part of the assets of the company available for distribution by the co-liquidators. As the proceeds from MHIL’s shares had previously been held in an escrow account, the JLs ordered that the proceeds be provided to CLICO in accordance with the order. It is not expected that further action will be necessary in this case, ”the report said.

Since 2019, in their third report, the co-liquidators have identified the disposal of Methanol Holdings (International) Ltd (MHIL) as “significantly advanced” and “will end during the period following this report”.

In CLICO’s 2017 audited financial report, the company’s 56.53% stake in MHIL is valued at $ 2.37 billion.

Appointment of co-liquidators

The JLs were appointed by the High Court in 2017 to manage CLF, with the power, among other things, to secure CLF’s assets and liabilities and to investigate CLF’s affairs.

On July 11, 2017, the government sought and succeeded in the High Court for the conglomerate, formerly chaired by Lawrence Duprey, to be liquidated because it was unable to pay its debt and JLs were to be liquidated. appointed to manage its affairs. The government’s argument was that the CLF was insolvent and that its continued operations were “reckless”, that it was in the public interest to liquidate it to pay off debt owed to the government and other creditors.

CLF’s most valuable asset, its other insurance company, Colonial Life Insurance Company (CLICO), remains under the management of the Central Bank of Trinidad and Tobago (CBTT) under Section 44D .

The shareholders of CLF are CL Duprey Investment Trust (21.8 percent), Dalco Capital Management Company Ltd (26 percent), the Ministry of Finance (14.2 percent), other parties (38 percent).


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