The Tribune

By NEIL HARTNELL

Tribune Business Editor

BAHAMAS First Holdings' chief executive yesterday told Tribune Business he personally believed the general insurance holding company would list on the Bahamas International Securities Exchange (BISX) in 2012 "if it's going to happen", adding that the Board was "very fluid" on the issue.

Pointing out that the company was still awaiting its audited financial statements for 2011, Patrick Ward, who is also Bahamas First Holdings' president, explained that it wanted to educate investors about how it was different from other BISX-listed stocks perceived as "non-risk taking".

Among the major benefits of a BISX listing, Mr Ward acknowledged, would be a better price discovery mechanism allowing all shareholders to know the value of their respective holdings at any given time, and the possibility of diversifying the company's investor base further.

He explained that several major institutional investors, who wanted to hold Bahamas First Holdings' ordinary stock, currently were prohibited from doing so because the company was not listed on BISX.

Bahamas First Holdings' Board of Directors approved the listing of the company's 36.305 million ordinary shares, together with its five million preference shares and $15 million worth of outstanding bonds, on BISX at a February 2011 meeting. Yet, to date, it has not moved on this approval.

"My own personal view is that if it's going to happen, it will probably be later this year," Mr Ward replied, when questioned by Tribune Business yesterday as to the timing of a Bahamas First Holdings' BISX listing.

"It's still being deferred until we've got a completed audit for 2011, which we're very close to doing. We're probably going to be ready with that in the next couple of weeks."

While having audited 2011 financials will be one step towards facilitating a formal listing among BISX's main board equity stocks, Mr Ward indicated that it was by no means certain the Board would consummate its initial decision.

"There's a possibility it might happen, but there's also a possibility it could be deferred still. The Board is very fluid on this issue," he told Tribune Business.

"It's all to do with making sure there's sufficient knowledge transferred to investors about the nature of our stock, versus other companies that are not perceived as risk-taking entities, which are listed on BISX."

Mr Ward did not go into detail about what he meant by this, although Bahamas First Holdings is widely perceived in the Bahamian insurance industry as an aggressive, acquisitive company that never likes to sit still and is always looking to expand. Its most recent deal was the acquisition of a 75.24 per cent majority stake in Sagicor's former Cayman-based general insurer, now renamed Cayman First.

Meanwhile, explaining the benefits that a formal BISX listing would bring, Mr Ward told Tribune Business: "There's a segment of our shareholder base that certainly wishes to see it happen, and we're committed to doing that, but at the same time we're expected to be prudent in the way we deal with the matter.

"For institutions that hold Bahamas First as part of their investment portfolio, a BISX listing would provide them with a very transparent mechanism for valuing their holdings at any point in time.

"Then there are institutions that would like to have Bahamas First in their portfolio, but are prohibited from holding the shares because we are not listed on BISX. Their minimum requirement is a BISX listing, and we could potentially provide a wider spread of shareholders in Bahamas First by doing so."

Collective net equity for Bahamas First Holdings' common shareholders was $45.6 million at year-end 2010, with their share of comprehensive income standing at $3.7 million - a 29 per cent drop from the $5.187 million generated in 2009.

Earnings per share (EPS) in 2012 were $0.10 per share, with Bahamas First Holdings' largest shareholder being Canadian-based The Economical Insurance Group, which has a 20 per cent equity stake.

Mr Ward said the company had obtained feedback from its shareholders on the merits of a BISX listing, and based on directions given at the Annual General Meeting (AGM), moved to "pursue it".

Bahamas First Holdings already meets the definition of a 'public company', although it is not listed on a formal exchange such as BISX. As a result, its corporate governance and other processes are much like those of BISX-listed entities, meaning listing should be relatively smooth and not require a major culture change.

"We actually operate, for all intents and purposes, as a public company anyway," Mr Ward said. "We're effectively operating as if we're already listed, as we're doing everything required of a public company."