After 16 years of investing in Cuban hotels and commercial real estate, Ceiba Investments Ltd. plans to list its shares on the Toronto Stock Exchange.
In order to fund new investment projects and to ease its dependency on cash flows from operations, the company decided to go public on Canada’s largest exchange, “a highly liquid international market,” Ceiba said in its annual report. Pending regulatory approval of the listing documents, the company plans to apply for a listing soon, Ceiba’s Sebastiaan A.C. Berger said.
In June, Ceiba agreed to terminate a three-year old agreement with its investment adviser and begin a conversion from a regulated close–end fund to an internally-managed investment company once an application for listing has been submitted.
“The company is well advanced in its reorganization and has taken numerous steps in preparation for submitting an application for listing,” Berger said in an email message to Cuba Standard. “However, the reorganization process has not been completed and the company has not yet applied for listing on the TSX.”
Ceiba had originally planned to complete the process before the end of this year, but it has been delayed by “international market conditions and other factors internal to the company,” Berger said. Ceiba now plans to submit an application for a ‘bare’ listing on TSX in the first or second quarter of 2012, he added.
Ceiba has quietly become one of the largest foreign investors in Cuban hotels, thanks to some $170 million in island-related investments. They include a large share in HOMASI S.A., a Spanish holding company that owns 50 percent of the Meliá Habana hotel; a share in Corporación Interinsular Hispana S.A., another Spanish company that owns the foreign half of three Sol Meliá-managed hotels in Varadero; and a 50-percent interest in TosCuba S.A., a joint venture that is developing a 400-room hotel at Playa María Aguilar near Trinidad. Construction is expected to begin in 2013.
Ceiba also holds a 49-percent share in Inmobiliaria Monte Barreto S.A., the joint venture that owns the Miramar Trade Center, a 600,000-square foot office complex in Western Havana.
Ceiba bought these participations since 2004 from other foreign companies. The company is completely debt-free.
Ceiba invests some of its funds by providing loans to Cuban borrowers. As of March this year, the company had close to $20 million outstanding from a loan to Casa Financiera FINTUR S.A., the main collection agent for Cuba’s tourism income; Ceiba has loaned FINTUR money since 2002. It also has $2.5 million outstanding from state bank Banco Internacional de Comercio S.A.
Ceiba declared a net profit of $13 million in March 2011, compared to a net profit of $528,000 in 2010.
At present, Jaime García-Andrade is chairman, and Sebastiaan A.C. Berger, Cameron Young and Enrique Rottenberg are the principal investment managers of the company.
