Investor lined up for Globe Trust
Stabroek News
April 23, 2004
A potential investor has been identified for Globe Trust & Investment Company Limited (GTICL) which wants controlling interest as well as a full banking licence in return for investing a "fair sum" in the bankrupt operations, says administrator, Conrad Plummer.
The Bank of Guyana is to conduct a fit-and-proper test among other checks on the investor before the transaction can move forward.
Plummer says a number of responses were received from the invitation for bids to reorganise Globe Trust and a preferred bidder was selected for negotiations from these. Talks have commenced and Plummer expects that in two to three months, conclusion would be possible.
"Yes, the investment will turn the company around but it will require some adjustments in the handling of the deposits and to the capital base," Plummer told Stabroek Business. He says enough finances are on the table to satisfy a portion of the deposit and to start the company back on its foot. He notes that it will take a reorganised GTICL a while to recapture the trust of all Guyanese.
The preferred investor, which Plummer would not name, is a foreign company in financial business and manufacturing with connections in the US and Europe and various holdings around the world.
Plummer said while he is in discussions with the company, it still has to make a formal application for a full banking licence and majority ownership of Globe Trust. He said he has sent up the relevant documents and the Bank of Guyana guidelines for the investor to work with.
The administrator, who has been looking into the day-to-day affairs of GTICL and planning for its reorganisation since December 2002, says he is optimistic about the outcome of the negotiations, while he recognises that a deal is not had until the signatures are affixed and the finances materialise. The fall-back plans would include going to another bidder, re-advertising or moving to liquidate GTICL.
"I am pretty optimistic about this offer. There is nothing so far, which has surfaced, to deter me," Plummer said.
GTICL, in business since April 1991, was licensed in 1999 to conduct depository financial business with authority to engage in trust business. However, in 2000 and 2001, a series of inspections by the Central Bank found the institution to be in breach of the Financial Institutions Act, and the Bank, with the intention to liquidate, seized the institution in September 2001. But a court challenge saw an order for its reorganisation instead.
There is almost $750M in deposits outstanding as well as a similarly large, if not larger, amount in loans to be collected. Plummer indicates that collections are still slow but GTICL is working out arrangements with debtors to pay regular instalments. He also said properties are being given to owners to sell to realise a higher value to settle the debt.