Caribbean Investment Holdings Ltd Acquisition of Scotiabank (Belize) Ltd (5716Q)
22 Giugno 2020 - 8:00AM
UK Regulatory
TIDMCIHL
RNS Number : 5716Q
Caribbean Investment Holdings Ltd
22 June 2020
Caribbean Investment Holdings Limited
22 June 2020
This announcement contains inside information
CARIBBEAN INVESTMENT HOLDINGS LIMITED - AGREEMENT TO ACQUIRE
SCOTIABANK'S LICENCED BELIZE BANKING OPERATIONS
Road Town, Tortola, British Virgin Islands, 22 June 2020 --
(London - AIM: CIHL; Bermuda - CIHL) (the "Company" or "CIHL").
The Company today announces that it has reached an agreement for
the purchase of Scotiabank (Belize) Ltd. ("SBL") from Scotiabank
Caribbean Holdings Ltd., (the "Seller") a subsidiary of The Bank of
Nova Scotia ("BNS"), for an initial purchase price of up to US$30.5
million ("Acquisition"). The Acquisition is subject to regulatory
approval and customary closing conditions.
Terms of the Acquisition
The Acquisition will be effected pursuant to a share purchase
agreement among the Company, the Seller and BNS dated 19 June 2020
(the "Agreement"). Under the terms of the Agreement the Company
will acquire all of BNS's licenced banking operations in Belize
through the acquisition of the entire issued share capital of
SBL.
Under the terms of the Agreement the Company will pay the Seller
an initial consideration of up to US$30.5 million (the "Initial
Purchase Price") at closing of the transaction. The Initial
Purchase Price amount includes both the expected shareholder equity
of SBL of US$28.5 million and a premium of US$1.5 million.
In addition to the Initial Purchase Price, the Company may be
required to pay up to an additional US$4.5 million in the event
that the shareholders equity of SBL exceeds US$28.5 million (the
"Additional Consideration") as a result of any regulatory change
occurring between signing and closing of the Agreement. Any
Additional Consideration will be payable upon the agreement or
determination of the post-closing consideration adjustment
process.
The consideration up to and including US$30.5 million will be
payable by the Company in US dollars. Any consideration payable by
the Company over that amount will be denominated in Belize
dollars.
Accordingly, the overall maximum consideration payable for the
Acquisition is US$35 million, which represents a Substantial
Transaction for the Company for the purposes of AIM Rule 12. The
Company will satisfy both the Purchase Price and any Additional
Consideration by using available cash resources of CIHL, which the
Board has made available for synergistic acquisitions in the
banking and financial services sector in the Caribbean and Central
America.
The Agreement is subject to regulatory approval and customary
closing conditions. In addition, the Agreement has a condition that
the notional aggregate consideration shall not exceed US$35
million. The Agreement has a long stop date for closing of 12
months from the date of the Agreement. The Company will make a
further announcement regarding closing in due course.
In addition to the Agreement, upon closing SBL and BNS will
enter into a transitional services agreement which will run for a
period of up to 18 months from closing, and, SBL, The Belize Bank
Limited ("BBL") and BNS (or its nominee) will enter into a foreign
exchange and deposit commitment arrangement relating to the deposit
of Belize dollars with SBL and BBL, and, the sale of US dollars and
purchase of Belize dollars by SBL and BBL, allowing BNS to extract
US dollars from Belize over time following closing of the
Acquisition.
Information on SBL
SBL represents Scotiabank's banking operations in Belize. It has
been in Belize since 1968, and currently has 9 branches and 21
ATMs. SBL offers a complete range of retail and commercial banking
services across Belize, including online banking and electronic
cash management.
For the financial year ended 31 October 2019, SBL recorded a
profit of US$5.30 million, and revenues of US$36.52 million. As at
31 October 2019, SBL had assets of US$389.9.
Reasons for the Acquisition
The Board of CIHL has been exploring potential acquisition
opportunities in line with its previously disclosed expansion
strategy. The Board of CIHL believe that the purchase of SBL is an
opportunity for the Group to expand its existing banking operations
in Belize and that there are synergies between the Group's current
banking operations and the operations of SBL. As a consequence of
the Acquisition, the Group's banking operations in Belize will be
significantly expanded. The Acquisition is expected to be
immediately earnings enhancing to CIHL.
Person releasing this information on behalf of CIHL: Philip
Osborne, Company Secretary
For further information contact:
Caribbean Investment Holdings Limited
UK +44 (0)207 248 6700
Cenkos Securities plc
Nicholas Wells +44 (0)207 397 8920
Note: This and other press releases are available at the
Company's website: http://www.cihltd.co.
Background Information
Caribbean Investment Holdings Limited ("CIHL") is a parent
holding company with no independent business operations or assets
other than its investments in its subsidiaries, intercompany
balances and holdings of cash and cash equivalents. CIHL's
businesses are conducted through its subsidiaries. The Belize Bank
Limited ("BBL") is incorporated and based in Belize and focuses on
the provision of financial services and lending to domestic
clients. Belize Bank International Limited is incorporated and
based in Belize and focuses on the provision of financial services
and lending to international clients. CIHL also owns an
international corporate services business based in Belize, which
operates as Belize Corporate Services Limited. Within Belize, BBL
is one of the largest, full service commercial and retail banking
operation with a head office in Belize City and eleven branches
extended into each of the six districts of Belize. The principal
operations of BBL are commercial lending, consumer lending, deposit
taking and related banking activities.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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