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TUESDAY, APRIL 30, 2024
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‘Death by 1,000 cuts’ fear on new Bimini airport fees By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
CONTRACT SIGNING FOR THE $80M BIMINI AIRPORT.
PRIVATE aviation operators yesterday voiced fears that the industry faces “death by a thousand cuts” amid a furious reaction to the imposition of multiple new fees to pay for Bimini’s $80m airport upgrade. Rick Gardner, a Bahamas ‘flying ambassador’, told Tribune Business that “ultimately the losers will be Bahamians dependent on tourism” if price-sensitive private pilots desert the island for other destinations after Bimini Airport Development
Partners, the private sector consortium charged with transforming the island’s airport, unveiled a host of new charges to help pay for their investment. The consortium, in an April 26, 2024, notice to private aviation operators obtained by this newspaper, revealed that it plans to introduce the new fees on May 6 with many set for a further increase come June 1, 2025. Many in the industry complained that the ten-day notice period is far too short, while asserting it was “pretty brazen” to impose the charges “without a penny being invested”.
$5.96 • Multiple new charges to pay for $80m upgrade • Private aviation ‘furious’ over 10 days’ notice • Airport operator says: ‘We’re open to dialogue’ “This notice is to serve as an announcement concerning the change of management at South Bimini International Airport,” the notice read. “Effective May 6, 2024, Bimini Airport Development Partners (BADP) will assume the management, operations and development of the airport. “BADP will begin immediate improvements of the airport to modernise and expand the facility, improve airside and navigational
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FOCOL raises $70m Credit market ‘very soft’ as growth financing pool mortgage demand off 15% • Preference raise beats target by $5m • $45m total adds to $25m rights offer • Investor confidence ‘humbles’ group By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net FOCOL Holdings’ top executive yesterday said it has “very likely” amassed the largest growth ‘war chest’ in its history after taking its recent capital raise to a combined $70m. Dexter Adderley, the BISX-listed petroleum products supplier’s president and chief executive, told Tribune Business it had been “humbled” by the level of investor and capital markets confidence shown in its expansion drive after its $40m preference share issue was oversubscribed by $5m. Given that FOCOL plans to keep the full $45m, when combined with the proceeds of its previous $25m equity raise via a rights offering to existing shareholders, it now possesses a total $70m that can be deployed to finance growth, acquisition and expansion opportunities. “It’s a very significant vote of confidence; quite a significant vote of confidence,” Mr Adderley told this newspaper of the $45m preference share raise. “We are humbled and grateful to be in this position, and we assure the investment
DEXTER ADDERLEY community that the funds will be put to a very strategic growth strategy across the group of companies. “It’s a uniquely strong position for us to capitalise on these growth opportunities.” The FOCOL president and chief executive declined to provide a specific timeline, or duration, over which the company will deploy its new financing other than to say this will take place over the “near to medium term”. He added: “It’s defined growth strategy. It’s not undefined. It’s a defined growth strategy and the investors will be able to see it deployed in a very deliberate, measured and responsible manner. We are in a very strong position.”
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By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net THE Central Bank’s governor yesterday conceded that the Bahamian credit market remains “very soft” with new residential mortgage applications falling by almost 15 percent year-over-year in late 2023.
John Rolle, addressing the banking regulator’s 2024 first quarter economic briefing, voiced optimism that the continued development of The Bahamas’ first-ever credit bureau will help drive renewed lending as it will provide institutions with a more complete history on borrowers to help them better judge credit risk.
Governor: $300m in overseas investment not ‘unmanageable’ By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net UP to $300m in annual foreign exchange outflows from overseas portfolio investments by Bahamians will not be “unmanageable” for the Central Bank, its governor reassured yesterday. John Rolle, speaking at the regulator’s 2024 first quarter economic briefing, said exchange control liberalisation measures that will allow Bahamians to invest up to $100,000 abroad annually without first requiring Central Bank approval will only impact the “composition”
of foreign currency outflows and pose no threat to the US dollar peg. Bahamians, as of June 1, will be able to invest this sum annually in overseas securities and real estate once they supply commercial banks with evidence that they have an investment account with either a local or foreign financial institution. The reporting mechanisms to oversee this are currently being put in place as the Central Bank moves to improve the ease of doing business for overseas investing. “The short of it is we think the banks are capable of conducting the due diligence around these transactions and it allows
External reserves’ $547m expansion set to reverse By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net THE Central Bank’s governor yesterday said he expects the $547m first quarter external reserves growth to be reversed over the next eight months and produce a year-end finish “moderately below” 2023. John Rolle, speaking at the regulator’s 2024 first quarter economic briefing, said the external reserves expanded by almost
half-a-billion dollars during the first three months of the year - a rate around five times’ greater than that seen during the same period in 2023. The $547m jump saw the external reserves, which ultimately support the one:one exchange rate peg with the US dollar, close March 2024 at $2.898bn more than $200m higher than at the same point in 2023. “Over the first quarter of 2024, the external reserves
accumulated at a significantly stronger pace of just over $0.5bn compared to less than $100m in the same period in 2023,” Mr Rolle said. “Through the end of April, this seasonal buildup was further extended, leaving balances near $2.9bn. “The Central Bank still expects that the reserves will contract over the remainder of this year to be less than they were at the end of 2023. This would absorb accelerated growth
in private sector credit, which the Central Bank is encouraging, while still leaving the external balances at comfortable levels to support the Bahamian dollar fixed exchange rate.” Asked by how much he expects the external reserves to decline by yearend, Mr Rolle replied: “I would say that we would expect [by] more than the $0.5bn [increase] that we’ve seen so far this year.
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He argued that “part of the malaise”, which has resulted in sub-optimal credit market conditions, has resulted from individual banks and other lenders historically relying largely on their own isolated data sets to judge borrower creditworthiness and loan pricing. As a result, they were often unaware of loan delinquencies the public to experience a more expedited process with gaining access to these transactions,” Mr Rolle said. “It will provide a more efficient regime. “We are still able to oversee what is happening, and be assured there is not an unwelcome effect on the foreign reserves. An unwelcome effect would be if we didn’t really have a good understanding of the demand or utilisation. “We believe that, given the robust state of foreign exchange markets in The Bahamas, which see $8bn in inflows and roughly the
JOHN ROLLE and problems at rival institutions. The Governor spoke as the latest Central Bank lending conditions survey, covering the 2023 second
SEE PAGE B2 same amount of outflows, this kind of liberalisations are less worrisome because the only thing we’re impacting is the composition of the flows for the most part,” he added. “It’s the composition of the flows that are being impacted by this liberalisation even though there is some drawdown in savings to fund these investments abroad. We don’t see that as representing the majority of potential transactions.” Asked by Tribune Business about the likely dollar
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