FirstCaribbean International Bank (Bahamas) will conduct a rights issue process on Friday, Terry Hilts, director of retail banking, Northern Caribbean, has confirmed.
“We expect the process to be fair and above board,” Mr. Hilts told The Guardian during an interview Monday.
Share rights are available to FirstCaribbean’s shareholders of record as at Nov. 8, and on Friday FirstCaribbean will be advising them of the offer, which would have a 90-day exercise period.
“However, we are providing additional information and we are looking forward to getting this important document out to our shareholders,” Mr. Hilts said in response to concerns raised about the July 2002 rights issue process.
“It is hard to escape the conclusion that CIBC substantially overpaid for Barclays by valuing the business at $321 millon. It is an open question whether existing FirstCaribbean shareholders should subscribe for the new shares at $6.10, when they are finally made available,” columnist Richard Coulson has said
Mr. Hilts said: “All our shareholders are provided with personal letters, which tells them how many shares that they are entitled to buy and it brings them up to date on events since July, 2002.”
The process will be monitored by the Bahamas International Stock Exchange and the Securities Commission.
FirstCaribbean was among the companies posting losses last week, down $0.25 (3.84 per cent), according to the Bahamian stock market as measured by FINDEX,
FirstCaribbean brings together two complementary and leading financial services businesses in the Caribbean, offering customers enhanced products and improved and extended access to banking services.
The boards of Barclays, CIBC and CIBC West Indies Holdings Limited (CWIHL) say the combination is in the interests of their respective shareholders and will provide benefits and opportunities for customers, staff and the relevant businesses beyond those that could be achieved by either operation on a standalone basis.
The board of CWIHL has considered fairness opinions rendered by Ernst & Young Corporate Finance Inc., and UBS Warburg LLC and says the terms of the transaction are fair and reasonable to all shareholders.
Total one-off restructuring and integration costs of $70 million are expected to be incurred by FirstCaribbean as a result by the end of 2004.
FirstCaribbean International Bank is expected to be the largest locally listed bank in the region, based on market capitalisation, with more than $9.5 billion in assets, more than 700,000 accounts and operations in 15 countries.
Last July, CIBC West Indies and CIBC Bahamas announced details of a proposed $62-million rights issue for CIBC West Indies and a proposed $18-million rights issue for CIBC Bahamas.
The Bahamas International Securities Exchange and the Securities Commission of The Bahamas have approved the Issue of a rights-offering circular by CIBC Bahamas. CIBC West Indies submitted a rights-offering circular for approval by or registration with the Securities Commission of Barbados, the Trinidad & Tobago Securities Commission, and the Jamaica Securities Commission and applicable stock exchanges.
By Lindsay Thompson, The Nassau Guardian
