P r e s s   R e l e a s e s  &  S p e e c h e s

home | board of directors | executive management | about  FINSAC | asset  management  | banking | insurance | regulatory framework | annual reports |
 press releases and speeches | useful linkscontacting us search site


The Gleaner - April 4, 2001

 

FINSAC pumps $2.2 billion into LoJ

THE STATE-OWNED Financial Sector Adjustment Company (FINSAC) has completed its take-over of Life of Jamaica (LoJ) with capital injection of $2.2 billion in accordance with an agreement ratified by investors almost five months ago.

LoJ said it received the funds on March 22, made up of $1 billion in cash and $1.2 billion in FINSAC notes, which will be converted to Local Registered Stocks (LRS) some time this month.

According to the life insurance firm, part of the cash injection represented payment of $111.5 million for the 1.1 billion ordinary shares acquired when both entities entered into an agreement on November 6, 2000, and which investors later ratified at an extraordinary general meeting, giving FINSAC an 80 per cent controlling interest in LoJ.

Finalisation of the deal means that FINSAC is now in a better position to negotiate the divestment of its stake in LoJ, which, a spokesman said last month, is expected to go to Cabinet some time this month after receipt of bids.

First Life is thought to be a front-runner in the bidding for LoJ, but expressions of interest have also reportedly come from Barbados Mutual, Life of Barbados, CLICo of Trinidad & Tobago, and COLINA of the Bahamas.

Wednesday Business understands that yesterday, when the bids were opened, CLICO placed the highest bid believed to be in excess of US$50 million.

In a news release, LoJ president and chief executive officer, Milverton Reynolds, said that with FINSAC's injection of the $2.2 billion, the insurance giant would be able to retire all its short term debts "that had a stranglehold on the company, impeding it from maximising profitability."

Mr. Reynolds also said the company's audited accounts would be completed within another three weeks, after which LoJ would be able to resume trading on the Jamaica Stock Exchange (JSE).

"The company's 2000 results will certainly be positive," said Mr. Reynolds, adding that "the results for the first quarter of 2001 are looking very good."

He said LoJ continued to maintain strong operating performance and all lines of the company's business were operating profitably. Cash flows and operating profits were positive and above budget, while debt and unit costs had been reduced.

LoJ said it ended the year as market leader for the 13th consecutive year with market share of more than 40 per cent in ordinary life sales, 54 per cent group health, 40 per cent group life, and 57 per cent of pension funds managed by life insurance companies, representing some $12 billion.

In July 2000, the JSE suspended trading in the shares of LoJ, a move which the insurance company said became necessary in light of the negotiations with FINSAC regarding its recapitalisation, and to avoid the impact of further speculation on the trading in its shares.

The JSE board had decided to suspend trading in LoJ shares because the company was late in filing its 1999 audited financial report, which should have been done by March 31, 2000.

We value your feedback and comments.
Looking for something in particular? Search Our Website.

Back To Homepage

home | board of directors | executive management | about  FINSAC | asset  management  | banking | insurance | regulatory framework | annual reports |
 press releases and speeches | useful linkscontacting us search site

Technical Problems, Comments, Questions? E-mail Webmaster