SIC DIVESTMENT PROCESS RESTARTS…
POTENTIAL INVESTORS ISSUED INFORMATION MEMORANDUM

ST. JOHN’S, Antigua – December 13, 2010
The process to divest Antigua & Barbuda’s State Insurance Corporation (SIC) restarted today, December 13, with the issuing of an Information Memorandum to potential investors in SIC by the International Finance Corporation (IFC), on behalf of the Government of Antigua and Barbuda. IFC is the private sector arm of the World Bank and is acting as lead advisor to the Divestment Unit, based in the Office of the Prime Minister.  That Unit is authorized to represent SIC and the Government of Antigua & Barbuda in all matters related to this project.

Ambassador Joan Underwood, who heads the Divestment Unit, announced today’s restart of activities toward identifying a suitably qualified investor to put SIC on a path for future growth and development. 

“The Divestment Unit is moving ahead with the project, which is a response to the strategic need to take the already successful State Insurance Corporation to the next level in order to ensure its sustainable development and profitability. This will include an expansion of its product line and its distribution channels,” Ambassador Underwood added.

She emphasised that SIC was selected as the first state-owned entity for which the Government was a seeking a strategic private sector partner because, as a profitable and a strong brand, it was anticipated that SIC would be more attractive to potential investors.  Additionally, it would allow the divestment team to negotiate from a position of strength – thereby securing the best possible returns.

This means that, in addition to ensuring the sustainable development of SIC, the proposed transaction is expected to deliver two other major benefits: the ability to empower the people of Antigua and Barbuda to participate in SIC’s success, while also maximizing the financial benefits from a viable industry player for the benefit of Antiguans and Barbudans.

Those expectations are based on the stated intention of the divestment team to negotiate, inter alia, for SIC to be majority owned by Antiguans and Barbudans; for some shares to be made available, at reduced cost, to employees of the entity; and for the government to retain a portion of shares in the divested entity – eventually making them available exclusively to the people of Antigua and Barbuda.

Additionally, the Government of Antigua & Barbuda will retain SIC’s accumulated value in the form of its real estate and other assets – this to facilitate plans for residential and/or commercial development.  The immediate cash to be realized from the transaction, combined with dividends to be earned from the residual share value, are expected to stimulate the local economy.

Ambassador Underwood also underscored that the Government of Antigua and Barbuda is to negotiate with potential investors to ensure continuity of employment for SIC employees and for the State Insurance Corporation brand be maintained for a predetermined period of time.

“We have come up with these negotiating positions based on feedback from the broad-based groups of stakeholders with which the Divestment Unit has consulted, enhanced by the expert guidance from the lead advisor, the IFC.  That consultative process has helped us to determine the best possible transaction structure which will reap optimum benefits for the Government and people of Antigua & Barbuda,” Ambassador Underwood said.

Additionally, she took the opportunity to explain that the Government of Antigua & Barbuda’s decision to divest the State Insurance Corporation was in keeping with international best practices, which call for Governments not to be major players in a competitive industry in which Governments serve as regulators.  Instead, Governments should assume the role of creators of strong, implementable regulatory frameworks as one way of ensuring that the interests of the consumers are protected, she added. (Ends)