CLICO seeks 6-month extension of bailout agreement

Colonial life Insurance Company (CLICO) is hoping to extend by another six months a shareholders' agreement its parent company, CL Financial, has with the Trinidad and Tobago government, CLICO chairman Gerald Yetming has announced.

Yetming, a former finance minister, said he expects the agreement, which expires in June, to be further extended by the six months.

"I would expect within the next month we shall have an agreement that will extend that agreement for a further period to allow for the discussions to take place between the government and the shareholders, relative to how we would treat with the outstanding amounts that would be due to the government," Yetming told the Trinidad Express newspaper.

US$1b bailout

The shareholders' agreement was signed on June 12, 2009 by former CL Financial chairman, Lawrence Duprey, and former energy minister, Conrad Enill, on behalf of the then Patrick Manning government.

Enill and Duprey signed the shareholders' agreement following the signing of a memorandum of understanding (MOU) between government and CL Financial on January 30, 2009.

The MOU gave government control of 49 per cent of CLICO's shares.

The Manning government injected TT$7 billion (US$1.01 billion) into CLICO in 2009 to keep the collapsed insurance firm running and protect policyholders.

Last September, through the passage of legislation in Parliament, the Trinidad government committed an additional TT$13 billion (US$2.01 billion) to keep the insurance company afloat.

"There is no risk or no danger, as far as I am concerned, with respect to the expiry of that agreement in June 2012," Yetming told the newspaper, adding that he is anticipating that the six-month extension would "allow some flexibility with time ... to have those discussions".

Finance Minister Winston Dookeran said a statement on whether an extension would be granted would be made "in due time".

CLICO, in finances made public in Janaury, posted a deficit of TT$9.4 billion (US$1.5 billion) for the year ending December 31, 2009.

Yetming said he expected the audited accounts for the year ending December 31, 2010, to be made public within the next month.

- CMC