Potential Globe Trust investor asks for extension
Stabroek News
November 14, 2006
The potential Globe Trust and Investment Co Ltd (GTICL) investor is seeking an extension to the November 3 deadline given by the Bank of Guyana to transfer US$3.5M before its application is considered, according to a reliable source.
The source did not reveal the reasons behind the investor seeking the extension or the length of time being sought.
Previously, the Bank of Guyana had notified the investor that it was not favourably inclined to consider its application, but after representation by GTICL Administrator Conrad Plummer, the bank decided that if the investor transferred the US$3.5M for the GTICL re-organisation plan it would consider the application.
On October 28, Plummer had told GTICL depositors at a general meeting, held at the Queens College Auditorium, that the potential investor must meet the two week deadline. The deadline ended November 3.
It is the Bank of Guyana's responsibility to approve the potential investor, after the Chief Justice ordered the re-organization of Globe Trust under the bank as set out in Section 50 of the Financial Institutions Act. Information about the potential investor was revealed to 71, of the 5000-odd GTICL depositors at the October 28 general meeting.
During that meeting Plummer said that with this investor a due diligence exercise was performed in May/June 2005 and a Memorandum of Understanding (MOU) signed on November 24, 2005. And it was based on this that an "application to Acquire Control of a Financial Institution" was made to the Bank of Guyana in December 2005.
On October, 31, 2005, the shareholders in recognition of the state of the company and the value of their shares, by resolution, reduced the stated capital of the company from $300M to $60M, a decrease of 80%, and in part to attract investors.
"I must advise that since the application in December 2005, the BOG has been engaging the investor in dialogue with regard to the application and the source of funding and had originally advised the investor that [it was] not favourably inclined to consider his application," Plummer said. But a letter dated October 20 from the Bank of Guyana to Plummer and copied to the investor stated in part: "Notwithstanding the foregoing, the return of Globe Trust to financial stability is in the interest of all stakeholdersā€¦the Bank is prepared on an exception basis to permit the investor to transfer the funds and to revisit the application for acquisition of control. Time being of the essence in the resolution of this issue the Bank grants two weeks within which to complete the transfer of the funds."
In terms of the funding Plummer, quoted from an email from the potential investor on October 27, which stated: "I am confident that I will have all the relevant documentation on your desk this coming week." Plummer cautioned that if for whatever reason, this or of the pillars on which the re-organisation plan rests, fails, the re-organisation will not materialize.
The re-organisation of GTICL is based on three pillars, the first is the approval of the investor by the Bank of Guyana, the re-organisation plan and the third pillar is funding the transaction, Plummer said.