Six vie for Cayman General

Six different companies have expressed interest in buying a stake in Cayman General Insurance, president and CEO Stuart Dack said at Cayman National Corporation’s Annual General Meeting on Tuesday.

A deal with one of the six companies is hoped to be finalised by the end of July, Mr. Dack said.

‘We expect to conclude a sale relatively quickly now.’

The Barbados-based Sagicor Financial Corporation, which is interested in obtaining a 51 per cent share in CGI, remains in the running, Mr. Dack confirmed.

Sagicor first expressed its interest in CGI several months ago, but no deal materialised.

‘Sagicor was very slow in coming to the negotiating table,’ said Mr. Dack.

Part of the reason for the Sagicor’s reluctance was the delay in finalising CGI’s Hurricane Ivan claim with the Cayman Islands Government, Mr. Dack said.

Sagicor also just completed a US$58 million deal to purchase the US-based American Founders Life earlier this month, something that has occupied its time and focus, Mr. Dack said.

However, the delay could turn out even better for Cayman General, as it now has a variety of possible deals to consider.

‘These are six companies we would like to do business with,’ Mr. Dack said.

CGI was at one time considering only the Sagicor offer, but once the initial deadline for a deal, passed, the company opened up negotiations to others, and was surprised at the number of interested buyers.

The interested buyers are not necessarily looking for the same 51 per cent stake Sagicor wants, Mr. Dack said.

‘Some are interested in a similar situation, but others have different interests,’ he said. ‘We can now look at all of the offers and make the best deal for the company.’

As a result of insurance claims caused by Hurricane Ivan damage, CCI showed an overall loss in the year ending September 2004 of just more than CI$45 million.

The insurance company saw its AM Best rating downgraded twice before withdrawing from the ratings pending the completion of its post-Ivan recapitalisation.

CGI reached a settlement with its largest insured, the Cayman Islands Government that included a 24 per cent stake in the company.

The pending sale would finalise CGI’s recapitalisation plan.

Cayman National Corporation’s strong trading performance allowed its subsidiary CGI to wait on a deal, Mr. Dack said.

‘The strength of the (CNC) group has meant we’ve had the luxury of time,’ he said.

The Cayman National Corporation group recently announced a CI$8.1 million profit for the half-year ending 31 March, 2005. The performance represented a nearly 60 per cent increase compared to the same period to March 2004.

The half-year financial results have put CNC on pace for record profits, Mr. Dack said. He said the third quarter results look strong as well.

‘I think this demonstrates we’re in good shape and have gotten over (Hurricane Ivan).’

One aspect of the company that hasn’t followed suit with the company’s strong performance is the value of CNC’s shares, which has dropped from CI$2.04 in March 2004 to CI$1.13 in March 2005.

Mr. Dack cited the effects of Hurricane Ivan for sluggish share sales.

‘People have gone through a tough time,’ he said. ‘And there’s not enough money on the island to invest.’

With CNC’s strong performance, Mr. Dack said he felt the shares were very well priced now.

‘The share price is really generated by one thing only, and that’s the willingness of people to invest in us,’ Mr. Dack said. ‘It’s up to us as a company to prove we are worthy of those investments.’

In other business during the Annual General Meeting, chairman of the board Benson Ebanks announced the resignation of Richard Hew from the board of directors.

Mr. Ebanks said Mr. Hew would soon become the CEO of Caribbean Utilities Company and could no longer give the time and commitment to CNC, so he resigned.

Mr. Hew will not be immediately replaced on the board of directors, Mr. Ebanks said.

‘We felt we are sufficient in number, so we did not have to move in haste to do that,’ he said. ‘We will seek a replacement in the future.’

Mr. Ebanks also announced two other directors, Sherri Bodden-Cowan and John C. Bierley, had reached the retirement stage of their board membership.

However, both retired members were still eligible to serve on the board and offered themselves for re-election, and both were successfully returned.

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