Clico drama in Trinidad and Tobago?

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This is not a case of bankruptcy. One is bankrupt when liabilities surpass assets. Clico is still a very asset-rich organisation. The challenges faced by the company was one of liquidity. As is the case of any financial institution, most of their investments are not cash, but in real assets. As such, the very large withdrawals from many clients in the past weeks (due to these clients having to meet their own personal commitments resulting from the downturn in the global economy) led to a shortage of cash for Clico. What the company then had to do was sell assets to meet the demand for liquidity. It is not the catastophe that people make it out to be and can NOT be compared to HCU which was just plain bankrupt. If HCU were to sell off all their assets, they still would not be able to pay depositors. Therein lies the major difference.

Additionally, Clico's assets are good assets. Republic Bank is the most profitable bank in the country and according to some sources, the Caribbean's largest bank. Additionally, Methanol Holdings is the reason for Trinidad being the largest supplier of methanol to the world. Thus, Clico is a global powerhouse which is experiencing a temporary setback.

So instead of causing panic towards an imperfect but nevertheless outstanding Caribbean brand, we ought really to offer truthful explanations to an unfortunate, yet manageable situation that has arisen in Clico.

This is not a case of run for your money before it's all gone. It would be unfortunate if such is the response of the masses.

ilyena

Here's the lowdown...
The Central Bank has moved in to take over some key elements of the CL Financial group.
The banking license of Clico Investment Bank has been revoked so sometime in the near future... CIB... the house on the corner that everybody knows... will cease to exist.
Strictly from an economic perspective... Clico is not bankrupt as in they don't have no money... its just that they don't have a cash flow... or they don't have cash in their pockets.
If they were to sell off their fixed assets... they should be able to return investors funds.
They are in the position they are in currently because they invested on the local market in TWO major things
1. Real estate - Do you remember #1 Woodbrook place that was supposed to be completed since 2007??
Many of those units still have not been sold and the local housing market has never been solid because of issues like squatting.

2. Methanol. - Clico owns one of the top producing methanol plants in the world... but with our current crisis... energy production has slowed almost to a dead crawl. Many of the plants in Pt. Lisas are operating at half mast... sometimes the staffing contingent is so small... I'd say they just have enough people that are needed to turn on the light switch..

These are the two local investments that once seemed pretty sound based on local demand for housing and international demand for methanol... a quantity that we produce ourselves...

People who are now in a quandry include policy holders and holders of investment portfolios... in fact, if you have any money with Clico be very worried...

As opposed to HCU... they have held SOOOOOOOOOOOOO much more of depositors funds simply because they've been around far longer than the HCU.
As you might recall... the HCU shot to the spotlight in 1998 when they began attracting stakeholders from across racial and religious divide.

In my humble opinion... gov't did take a partisan approach and should have meted out the same treatment to the HCU... but Ewart Williams seems to think that the reasons he provided for ignoring the HCU bailout are substantive.

Certainly... any holder of any insurance policy could be worried... and we're now all thinking that the only place that your money is safe is under your mattress...

I too lack confidences in government's talk of us being able to weather the storm and I think at this stage its only about you looking out for yourself.

trinitrish

Yes Jed!...Press conference just done....minister of Finance buss out to go back to her Parliamentry duties.

Gov't have to bail out otherwise...you know what kinda bacchanal going to happen dey??? CL Financial have plenty ppl money in this country. And...they say the world economic crisis ent go affect TnT....when the ostritch go pull the head out of the sand?? So that is the current situation until further notice........

Trinisoccer

I saying this for months, and Trintrish hit the nail on the head. I real vex now and the 'Roger' in meh go come out. The whole world in a major recession, near dam close to a depression, but all yuh hearing from Trinbago is that that ain't go affect we. This is just history repeating itself.

In the '70 money was flowing and same attitudes - drinking, partying, spending crazy. Brap Oil hit less than $20 a barrel and recession. Now no regulation we following the US. House prices gone crazy, the average person can't even buy a home - 3 million for a 2 bedroom prison cell in Woodbrooke that is nothing more than a pyramid scam to hide money gone bad!

I ain't feeling sorry for the high rollers. Is my parents, my family, my friends who work hard for they money and now have to wonder what next?! Which bank next?!!

This is not the end. Watch out!! Stay strong my people, but as my mother would say "Yuh better get serious."

Â¡Keisha!

Sounds like they are taking a page from all these US corporations book.

Ak1n@

well having taken over certain assets i dont consider it a bailout

a couple people i know are having coniptions of a delirious kind they started staring into space as they hear that thing

its basic
this recession is going to affect the world and the individual can make changes to their personal financial situation and not bother about the government.

in any case President Obama is looking to turn to alernate types of fuel (the US being a good customer of our natural gas)
and he is already anxious to put up wind turbines in an effort to achieve this

so looking at our problems based on our income from oil etc
it has only just begun

alee

When Clico sells what assets???
All those false assets that aint worth the hair on my boyfriend's chest?
I hope those frauds pay for all the people's pension money that they stole and squandered, but knowing the legal system in Trinidad, the only people who will end up paying are those who naively invested in the corrupt SOBs.

I've always been anti-Clico, Anti-corruption.
To everyone who invested in them.... my condolences... unless you know a good lawyer, your money's gone.

Cookie

Yes indeed, but the last i heard , is that central bank is gonna bail them out! So hopefully that should comfort some, to an extent.

julien

allyuh allyuh ...huh rite. LD is ah SMART man yuh know. Think why is he giving up a controlling interest in what may seem to others as a strong performing company. Think nah ! since last year there were talks of selling off certain interest from the CL group. But doing so would have resulted in all kinda panic. So what LD does, simply plays the global card and offer T&T Govt. a "bail out option". T&T Govt. on de odder hand gleefully grabs hook line sinker and boat. Clearly they eh have no other choice is dat or ....
CL Fin. is one of the big players here in T&T and it eh reach so by chance. LD go never stand aside and let it burn, no sah ! de man clearly ahead of the regular joe out dey. So meh peps just watch wha dey not sayin, read between de lines this ting eh just happen it was in the works loooong time.
--------------------------------------...
to add again, these big companies are goin tru a reces- session. What better excuse to send home people and cut labour cost. Work the existing "slave labour" harder cause they are greatful that it was not their head on the block this time. Like hotta rightfully pointed out check Guardian Holdings and RBTT.
Big picture...... NWO, yes let he who have eyes see.
Done say too much ah gone

hottawarrior - win lose or draw

im just hoping that with all this happening, we do as julien says and read between the lines. Friday was Clico/Republic/BA, who will it be tomorrow....notice that Guardian Holdings buy back 4% of their own shares, Royal bank of Canada take back over RBTT.

USA and England are officially in a REcession, China/Japan and India fighting to stay out of one, but T&T sooo good they not going to hit that state nah....yuh hearing my sarcasm??...

as somebody said, i go be banking under meh mattress oui.

dvdclarke

the financial crisis has finally hit my country.

sexi Z

its a sham to get govt's money

Rachel R

yes! that's a big thing here! i want to know what going on over the course of the next few months.

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