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The Gleaner - September 26, 2001

 

FINSAC still negotiating LoJ sale

VICE-PRESIDENT IN charge of the individual line of business at Life of Jamaica (LoJ), Paul Lalor, will be leaving the company ahead of a final agreement to sell the island's largest insurance firm to Barbados Mutual Life Assurance Society.

Although a mid-September deadline was set for the sale of LoJ to Barbados Mutual, sources said yesterday that it has still not materialised, as the Financial Sector Adjustment Company (FINSAC) and the potential purchasers were still negotiating.

Barbados Mutual has for some time agreed to purchase FINSAC's 76 per cent stake in LoJ, but the deal suffered a setback when the state-owned rehabilitation agency reportedly attempted to increase the US$45 million price tag for the company.

However, FINSAC's corporate operations executive, Patrick McDonald, said last month said that they had reached an agreement acceptable to both parties. Mr. McDonald, to whom Wednesday Business was referred yesterday for comment on the status of the negotiations, was unavailable for comment.

A source close to LoJ said staff at the insurance company had been advised that the deal would have been completed by September 15, but the deadline was not met and the parties were still having talks.

FINSAC acquired majority stake in LoJ last year when the company found itself in liquidity problems. As part of the move to rehabilitate the company and prepare it for sale, FINSAC has injected more than $2 billion into LoJ.

Asked if there was uneasiness among staff about the future of the company and any anticipated shake-up when Barbados Mutual takes over, the source said, "the staff is in an upbeat mood." That was attributable to FINSAC's injection of capital into LoJ, which, he said, has resulted in "all lines of business operating profitably."

The source could not say what impact, if any, the September 11 terrorist attacks on the United States indirectly had on the completion of the talks, but representatives of Barbados Mutual are expected in Jamaica next week, at which time LoJ staff are expected to get a more definitive position on what will happen.

The source said Paul Lalor will be leaving his substantive position at LoJ to join his father, Dennis Lalor, at the Insurance Company of the West Indies (ICWI) on October 5.

It was not confirmed what senior position Paul Lalor will be taking over, but he is believed to be replacing Mark Blakely, assistant vice-president for marketing at ICWI, who has left for greener pastures. Chief operating officer of LoJ, Kurtis Bray, will take over the individual line portfolio at LoJ in the interim.

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