The Tribune

By NEIL HARTNELL Tribune Business Editor COLINA General Insurance Agency had an almost-$2 million balance sheet solvency deficiency when it was acquired by its sister company, BISX-listed Colina Holdings (Bahamas), in early December 2011 for just $1, Tribune Business can reveal. The latter's audited financial statements for the 12 months to end-December 2011, which have been reviewed by this newspaper, reveal that at the acquisition date of December 1, Colina General Insurance Agency was suffering a $1.99 million net asset deficiency. As of that date, the agency, which issues property and casualty policies for Bahamas-based underwriters on a commission basis, had some $3.484 million worth of assets but $5.474 million worth of liabilities - hence the balance sheet solvency deficiency. Colina General Insurance Company's assets were shown as largely consisting of $2.452 million worth of accounts receivables, the remainder consisting of $551,114 in cash, $207,711 worth of property and equipment, and $272,983 in other receivables. In contrast, Colina General Insurance Company's liabilities largely consisted of some $5.262 million in accounts payables and other liabilities. Colina Holdings (Bahamas) move to acquire 100 per cent of its sister company, Colina General Insurance Company, was an inter-party or inter-group transaction, given that both are majority owned by the same parent, A. F. Holdings, the former Colina Financial Group. On the face of it, judging from the $1 purchase price and $1.99 million balance sheet solvency deficiency, it appears that Colina General Insurance Company was being transferred into the protective embrace of its far stronger sister, which has some $550 million in total assets and around $119 million in net shareholder effectively. It is difficult to form an iron-cast opinion, given that no income statement is provided for Colina General Insurance Company, and its revenue streams and book of business will contain value. However, it would appear that the publicly-listed Colina Holdings (Bahamas) is almost 'rescuing' its privately-owned sister. A. F. Holdings initially established Colina General Insurance Company as an underwriter in 2002-2003, but subsequently sold the book of business to Bahamas First Holdings and became just an agency. Elsewhere, Colina Holdings (Bahamas) also revealed that it suffered a collective $599,806 loss in 2011 on its investment in two associates last year, largely due to a $787,622 goodwill impairment involving its equity interest in offshore bank, Ansbacher (Bahamas). Ansbacher (Bahamas) is another related party, the A. F. Holdings group having acquired this entity through its Sentinel Bank & Trust. Colina Holdings (Bahamas) holds a 7 per cent stake in Sentinel, with its Colina Insurance Company subsidiary holding another 12 per cent. The two insurance entities acquired their stakes for $3 million and $5 million, respectively, in July 2009, making their collective 19 per cent worth $8 million at the acquisition date. Sentinel had two months previously acquired Ansbacher (Bahamas) in May 2009. While Sentinel managed to cut its net loss by 53.4 per cent year-over-year, reducing it from $731,577 in 2010 to $339,189 this time around, Colina Holdings (Bahamas) collective share of the loss was still $64,446 - down from $139,000 the year before. Sentinel's revenues for the 2011 full-year were down from $8.198 million in 2010 to $7.058 million, a decline of 14 per cent year-over-year. On the balance sheet side, its net assets were relatively flat at end-2011, standing at $27.765 million compared to $27.893 million in 2010. The woes at Sentinel cancelled out the $252,262 that Colina Holdings (Bahamas) earned in 2011 as a result of its 30 per cent stake in Walk-In Holdings, the holding firm for the three Walk-In clinics. The clinics generated collective revenues of $3.593 million in 2011, and an $840,872 profit for the full year, reversing the previous year's $867,658 loss. Colina Holdings (Bahamas) also increased its payments to affiliates in 2011, raising these from $3.393 million in 2010 to $4.025 million last year. Revenues earned from related parties declined from $1.58 million to $1.375 million in 2011.