The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Grand Bahama Power Company’s (GBPC) planned $35 million capital raising has been delayed again, this time by the need to obtain exchange control approval from the Central Bank of the Bahamas, Tribune Business understands.

Capital markets participants had told this newspaper that GBPC’s private placement, either in the form of preference shares or bonds, was expected to be released by the end of this week.

It had been anticipated as early as Wednesday by some, but multiple sources yesterday told Tribune Business that the debt offering - which had been awaited for several months - was facing a further delay due to the need to obtain exchange control approval from the Central Bank of the Bahamas.

“It’s with the Central Bank,” one source told Tribune Business.

Exchange control approval would likely be required because the $35 million issue’s proceeds are likely to, at least partially, be used to part-repay a $56 million US dollar loan from Scotiabank that financed construction of GBPC’s new West Sunrise Plant.

Anthony Ferguson, principal of CFAL, which together with CIBC FirstCaribbean International Bank is acting as the offering’s placement agent, did not return Tribune Business’s phone calls despite this newspaper leaving two days’ worth of messages.

Philcher Grant-Farquharson, GBPC’s spokesperson, earlier this week declined to comment. She said the company could not speak publicly before any material event took place because it was listed on BISX (via ICD Utilities, which holds 50 per cent of its equity), while majority shareholder, Emera, is also publicly traded in Canada.

It is unclear why the Central Bank would take its time in granting foreign exchange control approval, although one factor could be the traditional Christmas season drawdown on the foreign reserves and lack of replacement currency inflows.

Tribune Business was told by capital markets sources that the GBPC offering, had it launched this week, was intended to close on January 4, 2013.

The short window, with Christmas in between, indicates that the offering had received significant expressions of interest from investors keen to buy in.

Emera’s own financials for the 2012 second quarter indicate that Grand Bahama Power financed a large portion of the $80 million power plant’s costs via a $56.2 million unsecured loan from Scotiabank (Bahamas) that was taken out in January this year.

Loan repayments, at the three-month LIBOR rate plus 1.2 per cent, are set to start by January 2013 at the latest and be paid quarterly over a 10-year period.

GBPC is seeking to replace/refinance some of the $80 million in bank debt it took on to finance construction.