Antigua St John's - City West MP Gaston Browne has defended his alternate suggestions for the State Insurance Corporation. This followed Finance Minister Harold Lovell's assertion on Tuesday that while Browne's plan had merit, it was not as satisfactory as the government's plan for divestment.
Now, Browne has issued further details to support his case.
His latest statement is reprinted below.
Hon. Gaston Browne in a media statement said that Minister Harold Lovell has failed miserably to support his assertion that the bilateral sale of State Insurance Corporation (SIC) will result in “best value for the assets and shares” of SIC and has called upon the Minister to provide his justification. Browne responded that ‘Perhaps the Minister meant best value for the UPP cronies and so-called “strategic partner,” certainly not best value for the Government and people of Antigua & Barbuda.’
MP Browne provided the following rationale to justify the superiority of the proposed ALP’s divestment model to transform State Insurance into a publicly traded company with the Government and people of Antigua & Barbuda retaining controlling interest (51 percent) of the shares. Here follows his rationale:
1. The strategic partner which most likely will be a foreign entity would result in the effective foreignisation of the ownership and control of State Insurance Corporation despite the best efforts of the Government to limit the foreign strategic partner’s shares to 49 percent.
2. UPP’s model will result in the net repatriation of profits to a foreign country.
3. The very structure of the bilateral sale will result in the cannibalization of the assets of SIC and would reduce the value of the firm.
4. Reduction or elimination of the corporation’s goodwill and the value of SIC.
5. The bilateral sale is far less transparent than the listing process and could give rise to certain corrupt practices including collusion from insiders thereby reducing the realisable value of SIC.
6. A public listing could result in a share premium of say 25 to 30 percent which will maximize the value of the firm as opposed to a bi-lateral placement.
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