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Finance Minister Colm Imbert says some Clico policyholders are to benefit from a billion-dollar payment shortly.
He said that while making a ministerial statement yesterday in the Senate on the Clico resolution plan.
Clico and other companies owned by CL Financial collapsed in 2009 and was given a bailout by the then government. Additional funds were subsequently allocated to the financially troubled company.
Imbert said despite the fact that “not all of the assets of Clico have been disposed of; it is now proposed that all outstanding resident statutory fund short-term investment products be paid in full.”
He said that “will result in a cash payment to the Government of about $1.3 billion for the balance of the EFPA and the payment of about $100 million to other policyholders.”
He said that initiative had the advantage of “resulting in a positive cash flow for the Government while also enabling a positive statement to be made that all outstanding resident statutory fund policyholders were now able to access all their funds.”
He added: “Clico can now repay the $400 million due to third party policyholders in advance of making payments to the Government on its $2.1 billion liability,” adding that it “will not affect the amount which Government will receive on this liability but will slightly change the timing.”
He told legislators: “Government will be paid upon the sale of Methanol Holdings International Ltd or given value on the completion of the valuation of Home Construction, whichever comes first.”
He also said the non-assenting policyholders “will now all be paid the remaining 15 per cent value of their policies owed to them.”
Imbert said the Clico resolution plan was ongoing and further resolution would be made on a regular basis as it unfolded.
Measures proposed for other creditors will be announced in due course.
He said earlier yesterday: “The auditors have confirmed that the amount expended by or due to the Government on the Clico bail out is close to $22 billion.”
The minister said the Government was “hopeful at this stage that it can recover a significant amount of this sum, but this will depend on the success of the disposal of the remaining assets of Clico and Clico Investment Bank, among other things.”
He insisted: “Clico is still insolvent with an excess of liabilities over assets of the order of $1 billion and as a result has indicated that it is not in a position to relinquish control of Clico at this time.”