fp Turks and Caicos

TCI Bank Ltd.’s customers must continue to hold their breath after Justice Richard Williams agreed Aug. 3 to adjourn the petition for the winding up of the bank by the Financial Services Commission in light of serious consideration by depositors and shareholders of an offer on the table to rescue the bank by two Eastern Caribbean banks, St. Kitts Nevis Anguilla National Bank Ltd. and National Bank of Dominica Ltd.

With the support of all parties involved, a second hearing has been set for Friday, Aug. 6, when Justice Williams will consider terms to hold public meetings of creditors and shareholders to formally agree to a scheme of arrangement or reconstruction. The meeting would give creditors the chance to vote on one of the current rescue proposals and having a hand in deciding the fate of their money, as opposed to watching the bank slip into full liquidation.

If the proposed scheme can be agreed upon by 75 percent of the creditors in value who attend the meeting, a rescue of the bank appears to be a real possibility.

What prompted the new hope seems to be the latest proposal by ECIC Holdings Ltd., which represents several Eastern Caribbean banks.

The group appears to have done what no other potential investor could do, winning the support of fellow stakeholder, the National Insurance Board (NIB). Representatives for ECIC say they have had ongoing discussions with all major shareholders, including NIB, the Creditors Committee and the local shareholders committee.

After several rounds of public meetings last week, the Eastern Caribbean banks continue to gain support from TCI Bank depositors for their plan to rescue the bank, currently in provisional liquidation.

According to the group, the feedback from the meetings demonstrated that there is overwhelming support for the reopening of TCI Bank and their plan to rescue it.

This is not a new idea for the group, which was already in talks to help the ailing bank back in April when the Financial Services Commission (FSC) put on the brakes by placing the bank in provisional liquidation. At that time, ECIC confirmed they were part of a group which included major stakeholders attempting to finalise an agreement with a potential investor for the rescue of TCI Bank.

If they are successful in convincing all parties, including Justice Williams and the FSC, their plan will allow for immediate access to funds for all small depositors in the bank.

All deposit accounts will have no restrictions placed on the first $50,000, which according to the group applies to approximately 97 percent of the bank’s depositors.

Relief will also be offered to small business owners with frozen funds in excess of $50,000 which will be allowed withdrawals of quarterly installments in increments of $12,500 starting three months after the bank reopens.

All other depositors with balances in excess of $100,000 will be required to leave their funds in the bank for up to five years, earning an interest rate of 1.75 percent per annum from the day the new bank opens its doors.

Although shareholders have been told by Provisional Liquidator Anthony Kikivarakis their shares are worthless, the EC banks have devised a scheme to give them some value. In the current offer by the EC banks, shareholders would be given some nominal value shares in the new bank in exchange for their previous, currently useless, shares in the TCI Bank.

The group says this is a sign of their commitment to the shareholders and the bank moving forward.

According to statements by the group, the total new liquidity that will be available to the Bank will be at least $25 million.

Within two weeks after approval of the plan, the EC Banks say they can be operational. They have already set out an experienced management team to run the bank and plan to appoint a new board of directors to oversea its operations. They also plan to rehire staff as necessary and will develop a new strategy to build confidence in the new bank.