The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamian capital markets are gearing up for a busy fall/winter season, Tribune Business has been informed, with both the Public Hospitals Authority (PHA) and Grand Bahama Power Company seeking multi-million dollar financings.

The PHA is seeking $40 million to fund the purchase of technology and equipment for the new critical care block at Nassau’s Princess Margaret Hospital, sources familiar with developments have informed this newspaper, with Bahamas-based banks having submitted ‘offers’ to provide this and how it can be structured.

Grand Bahama Power Company, meanwhile, is understood to be readying to approach the Bahamian capital markets for a similar multi-million dollar sum.

Industry sources have confirmed to Tribune Business that the monopoly power supplier has appointed a combination of CIBC FirstCaribbean’s capital markets team and CFAL to act as its financial advisers and placement agents.

While the sum Grand Bahama Power Company is seeking is uncertain, sources suggested to Tribune Business it was similar to the $40 million the PHA was seeking. It is thought likely that the electrical utility is seeking to replace/refinance some of the $80 million in bank debt it took on to finance construction of its new West Sunrise Power Plant, probably through a preference share or corporate bond issue.

Herbert Brown, managing director of the PHA, has failed to return repeated Tribune Business calls seeking comment on its new $40 million financing. Questions e-mailed to Grand Bahama Power Company representatives were not returned before press time last night.

Still, in Grand Bahama Power’s case, one capital markets source confirmed that a financing issue was being prepared to come to market. “They borrowed some money for some projects up there, and are probably replacing it with capital or paying off the debt,” the source said.

Another contact added: “It’s something to do with the new plant, and what they’re trying to do. Emera, the Canadian parent, funded it all, and GB Power are putting in their pro rata share.”

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.

The financials also indicate that Grand Bahama Power Company’s Port Authority-approved rate structure allows the utility a 10 per cent return on the base rate it charges consumers, a move designed to recoup its - and Emera’s - investment in the West Sunrise Plant.

Tribune Business understands that placement agents/advisers to both the PHA and Grand Bahama Power have been checking each other’s timing in terms of coming to market, wanting to ensure they avoid diluting each other. With the Government likely to take $300 million in liquidity out of the system, if its latest $100 million bond issue proves succcessful, neither wants to cannibalise the other if they end up competing for scarce capital.

Upon completion, PMH’s $52.3 million Critical Care block will comprise six state-of-the-art operating theatres with modern technology.

The unit will also comprise 18 recovery beds; 20 ICU (Intensive Care Unit) rooms; 48 Neonatal Intensive Care Unit (NICU) beds; new laboratory facilities; upgraded administrative facilities; upgraded electrical, water and sewerage; air-conditioning and fire protection services; and a new main entry into the facility and shared services.

It is being constructed on the northern side of the PMH campus.