Chief Marketing Manager Stephen Worme (l) General Manager Peter Williams (r) of BL&P
According to Light & Power Holdings Limited 2009 Financials, “sixty-two per cent of the shares in Light & Power Holdings Ltd (LPH) are held by approximately 2,800 Barbadian shareholders.” The recent offer by Emera Inc. (“Emera” – Toronto Stock Exchange listing: “EMA”) to make an offer to other shareholders in LPH has been approved by the Barbados Stock Exchange (BSE). LPH is the parent company of the Barbados Light & Power Company Limited (BL&P).
It is noteworthy that as at 20 December 2010 the closing price listed on the BSE is BDS12.00. The offer made by Emera Inc “to purchase all issued and outstanding common shares in Light & Power Holdings at a cash price per share of BB$25.70 will be hard to ignore by the 2800 Barbadian shareholders. Under normal circumstances it would be hard to ignore the significant capital gains to be made, the offer is made all the more attractive in a recessionary environment. It has been reported the offer (25.70BDS) by Emera Inc mirrors what it paid to Leucadia National Corporation in May 2010 to acquire its current 38% of common shareholding in LPH.
The prospect of the BL&P being managed by a Canadian 5.8 billion asset based company appears to be an attractive proposition, on the surface. No doubt the management of the company must be feel pleased that a highly successful company like Emera Inc would ‘cherrypick’ LPH to add to its portfolio. One cannot help but wonder however at the timing of the recent move by LPH to apply to the Fair Trading Commission (FTC) for a rate review. In January the FTC responded favourably by granting a rate of return of 10% instead of the 10.48% requested by LPH.
A question which was asked by a commenter “can you imagine a foreign based company owning a sovereign nation only power supply? We have really lost our way for thirty pieces of silver.” maybe of concern to many Barbadians. Such a concern comes on the announcement that government is actively considering divesting itself of the highly profitable Barbados National Bank shares owned by Republic Bank Limited based in Trinidad. It appears the open door policy of Barbados extends further than immigration. Almost every profitable or prized Barbados company has now surrendered to foreign ownership. While BU is not against foreign investment flowing into Barbados, one senses that there has not been any purpose or strategy guiding how we allow foreign interest to cherrypick our best companies in recent years. Is it conceivable that the national agenda of Barbados is now being influenced from boardrooms in Port of Spain, Toronto and London? Some may respond though, hasn’t this always been the case? We may have removed the chains from our ankles but so they remain on our minds if we are to judge by our actions in 2010.
Read the Press Release announcing BSE approval
Notice to Shareholders of Light & Power Holdings Ltd.
HALIFAX, Nova Scotia, Dec. 20, 2010 /PRNewswire/ — Emera Inc. (“Emera” – Toronto Stock Exchange listing “EMA”) wishes to advise all shareholders of Light & Power Holdings Ltd. (“Light & Power Holdings” – Barbados Stock Exchange listing: “LPH”) that the offer to purchase all issued and outstanding common shares in Light & Power Holdings at a cash price per share of BB$25.70 (twenty five Barbados dollars and seventy Barbados cents) has been approved by the Barbados Securities Commission and the Barbados Stock Exchange.
The offer will open on December 20, 2010 and close 35 days later on January 24, 2011. The Offer and Circular will be sent to all Light & Power Holdings shareholders not less than 28 days prior to the close of the Offer.
At the current U.S. dollar to Barbados dollar exchange rate, this offer is the same as the price Emera paid to Leucadia National Corporation when it acquired 38% of Light & Power Holdings in May 2010.
Light & Power Holdings is the parent company of The Barbados Light & Power Company Limited (“BLPC”). BLPC is the sole electric utility operator on the island of Barbados, serving 120,000 customers. BLPC has three power generation stations consisting of 239 MW of installed capacity.
About Emera
Emera Inc. (EMA and EMA.PR.A -TSX) is an energy and services company with $5.8 billion Canadian dollars in assets. Electricity is Emera’s core business. Approximately 94% of Emera’s revenues are earned by Nova Scotia Power Inc (NSPI), Bangor Hydro Electric Company (BHE) and the Brunswick Pipeline. NSPI and BHE are wholly-owned regulated electric utilities which together serve 603,000 customers. The Brunswick Pipeline is a 145 km gas pipeline in New Brunswick. Emera also owns 19% of St. Lucia Electricity Services Limited, which serves more than 50,000 customers on the Caribbean island of St. Lucia, 25% of Grand Bahama Power Company which serves 19,000 customers on the Caribbean island of Grand Bahama and 38% of Light & Power Holdings, which serves 120,000 customers on the Caribbean island of Barbados through its regulated electric utility, The Barbados Light and Power Company. In addition to its electric utility investments, Emera owns Bayside Power, a 260 MW gas-fired power plant in Saint John, New Brunswick; Emera Energy Services, a physical natural gas and power marketing and asset management business; a joint venture interest in Bear Swamp, a 600 megawatt pumped storage hydro-electric facility in northern Massachusetts; a 12.9% interest in the Maritimes & Northeast Pipeline; and an 8.2% interest in Open Hydro.
For further information:
Emera – Investor Relations:
Jenifer Nicholson, CA
Senior Director, Stakeholder Relations
(902) 428-6347
Emera – Media Relations:
Sasha Irving
Corporation Communications
(902) 428-6685
(EMA.)
SOURCE Emera Inc.
@Chris
A case of the calf now getting fat perhaps?
@David…
I would put it a slightly different way:
Watch your ass[ets]… Because at the end of the day (today) someone will happily take them from you if they can.
(ref: Machiavelli / Rand / et al)
The following comment was received by email:
Hello Sargeant.
Perhaps Mr Harper had its own priorites based on narrow political calculation. But that can not fairly be represented as the Big Picture.
Mr Clement, the Minister who announced the block, in fact gave no specific reasons. The veto was made under the Investment Cananda Act which demands buyers demonstrate a “net benefit” for Canada. In other words, not in the interests of the country.
However, BHP then walked away because (amongst other things) it was being asked to continue its spending on its existing potash project, Jansen, in Saskatchewan.
Such expenditures – in this case estimated at CAD$12bn – look very much like the type long sunk in Potash Corp which BHP hoped they would not have to duplicate (at least not immeadiately) with a takeover.
Yet even if Jansen continued Saskatchewan stood to lose at least CAD$2bn in tax and royalties as ownership of Potash Corp would have allowed BHP to write off the capex costs of its investment in Jansen under Canadian tax law. This data from a Conference Board of Canada report, by the way, an independent organisation.
On these grounds Saskatchewans judged the net public benefit impact as negative.
Saskatchewans may indeed have driven the entire process using political leverage – but not on some idle whim. They set their stall out on the economics (at least publicly) and argued their corner democratically. It is overly cynical to accept that these arguments weighed nothing at all to Messers Harper and Clement.
And who is to say the same type of illumination the whole episode created would not benefit the discussion of the BL&P case?
I happen to agree with rawdon adams.I think the government who has 25% shares in the BL&P should come out and condemn that sale.
Why does the average investor buy shares?
Just in case you didn’t read this (Nation News; back page)…
http://www.nationnews.com/index.php/articles/view/worry-not/
Peter Williams, the Managing Director of Barbados Light and Power (BL&P), is reported to have said that “Barbadians have nothing to fear about foreign ownership of the Barbados Light & Power Company (BL&P).
Mr. Williams. With all due respect.
I, as a Bajan, would fear having a critical utility 100% owned by a foreign entity, and thus being able to request delisted from our stock exchange, and thus not required to submit audited annual financial reports available to the public.
But… I do appreciate that you and your team monitor the blogs….
@Chris
What do you expect these guys to say? There is a windfall of extraordinary proportion to be had. Peter Williams diplomatically refers to the emotional argument but he cleverly does not expand. They will retire to their built up communities, yacht, golf courses whatever. Life is beautiful.
@BU.David: “What do you expect these guys to say?
Exactly what they are saying.
And, for the record, I know and like Peter and his team.
@David: “There is a windfall of extraordinary proportion to be had.
Agreed.
But is this a windfall for the long-term minority investors of BL&P, BL&P’s executives, or a foreign entity?
Only time will tell.
Bajans in Canada can buy shares in Emera which traded today at $31.77 on the TSE.
@Hants: “Bajans in Canada can buy shares in Emera which traded today at $31.77 on the TSE.
Thanks for that Hant. (Sincerely.)
Can Bajans in Barbados buy shares in Emera? (A question raised by Skeete and Williams.)
A separate question: when was the last time a trade in BLPH occurred on the Barbados Stock Exchange?
Hmmmmmm….
they should be able to buy shares. how much the brokerage cost would be interesting to find out, a call to signia would give you the answer
RJH Adams
Correction: 13 of 14 elected MPs from Saskatchewan are members of Harper’s caucus not 17 of 18 as I stated.
Attached is a G&M Editorial which casts doubt on the “net benefit to Canada” reason for turning down the offer.
I agree that perhaps the issue of a foreign takeover of BL&P should be more widely ventilated as it can be considered a monopoly. Usually public discussions on these matters are driven by Parliamentary debate but last time I checked the subject has not been raised in Parliament. Perhaps the Parliamentarians don’t think it makes a difference whether control of the Utility is in local or foreign hands.
Number crunching aside, in the absence of an active stock market in Barbados I think that the average investor would find it difficult to turn down the opportunity to sell their shares at the price offered.
http://www.theglobeandmail.com/news/opinions/editorials/potash-investment-friends-with-net-benefit/article1800040/
http://www.theglobeandmail.com/news/politics/potash-takeover-failure-blamed-on-billion-dollar-pledge-requirement/article1800044/
It is at times like now we truly understand who controls Barbados. Our politicians will follow the money here Sarge and not to forget the media.
@BU.David: “It is at times like now we truly understand who controls Barbados.
With all due respect David…
I would argue that it is times like this when we can sample the true resourcefulness and positions of Bajans.
Let’s see what happens….
Care to take a wager Chris?
Seriously, the first test will be if this matter becomes a platform issue in the St. John by-election.
Only way this become a platform issue is if the pm announces what they plan to do with their shares before jan 20. I expect there to press conference on the 24th saying they going to sell their shares.
@David: “Care to take a wager Chris?
Sure.
If I win you reveal your real name.
If you win, name your prize.
@David: “Seriously, the first test will be if this matter becomes a platform issue in the St. John by-election.
But… We both know that neither party have the balls to ask these questions.
That’s why we ask them.
Isn’t it?
@anthony
The opportunity is there for the Opposition to make this an issue as well? Given Arthur’s record of allowing Bajan companies to be gobbled up it would be an about turn. We really need to explore the emotional argument here.
well that would be the double edge sword for the opposition. though they could argue there strategic importance of bl&p is way more important the bnb and icb. though then i guess they argue we done so well with lime all these year in foreign hand why no bl&p too.
First and foremost, the Democratic Labour Party Government must not sell the NIS shares in Barbados Light and Power to anyone. They must not make the same mistake they did when they sold Government’s shares in Cable and Wireless a few years ago. They must take the same excellent stance they have taken with regards to the sale of Government shares in BNB.
We are now being told by Barbados Light and Power Managment what a wonderful opportunity it would be for Barbadians to surrender complete control our electricity to Canadians. The Managers at the Barbados Light and Power no doubt stand to make millions of dollars in bonuses if they can pull off this scam on Barbadians, but they are not telling them that.
This is the same lying Managment team at the Barbados Light and Power who lied to Barbadians by telling them how cheap electricity would be once they installed two new generators at Spring Garden. Far from getting cheaper electricity Bajans are now paying more than ever for electricity. Light bills are now like morgage payments. They lied to us then. Now they are lying to us again about EMERA. The words of the Managment of the Barbados Light and Power are not to be trusted if the past utterences from them are to be considered. If they tell you to walk then you should run.
EMERA , from persons who live in Canada, has a poor track record of maintenance, they charge the highest for electricity, and even a high wind puts their electricity supply out of service. Is this the type of company that we want? The share holders in the Dominican Rep. foolishly sold all their shares to an overseas company, now they are plauge with nightly rolling blackouts and there is nothing that they can do about it. Do we want a similar thing here in Barbados?
Also to be considered is the fact that someone on this blog posted that Barbados Light and Power shares are really worth about thirty six dollars, which means that on the stock exchange they maybe undervalued. If this is so then Barbadians are being taken for a ride. EMERA may well be getting a hell of a deal at what they are offering.
Barbados Light and Power Company should never be one hundred percent owned by any overseas company.
Have we no pride? What next are we going to sell to overseas interests? Bridgetown and and charge a toll to enter it.
This is the same lying Management team at the Barbados Light and Power who lied to Barbadians by telling them how cheap electricity would be once they installed two new generators at Spring Garden. Far from getting cheaper electricity Bajans are now paying more than ever for electricity. Light bills are now like morgage payments.
Carson do you know about gerenating electricity? do you know that fluctuating oil prices determine most of the bill? obviously you don’t otherwise you wouldn’t be soured the otherwise strong argument on a side note that your wrong on.
Anthony
Speak for your self.
Even when there is a dip in the price of fuel the reduction in electricity cost to ME the consumer is so small thatI need a microscope to see it.
Smh maybe you need to come home to see reduction in cost you been away too long to know such.
Emera lays off workers http://bit.ly/h3uCAz
Emera Utility Services of Lakeside is blaming the layoffs on the completion of several renewable energy projects at the end of 2010, including Nova Scotia Power’s Digby wind farm and the Glen Dhu wind farm in Pictou County, spearheaded by Shear Wind Inc. of Bedford.
Emera Utility Services, an affiliate of NSP’s parent company Emera Inc., employs 300 workers in Nova Scotia and New Brunswick and has been in business for 10 years.“