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Trinidad bank is sold for US$2.2 billion
Trinidad: Local Royal Bank of Trinidad and Tobago (RBTT has been sold to the Royal Bank of Canada. The deal was sealed on Wednesday even as a large group of shareholders with smaller shareholdingss voted against the sale of the bank.
This has ended months of speculation about the future of RBTT. The price offered to shareholders is worth US$2.2 billion. Final vote count results showed that shareholders had voted 98.18 per cent in favour of the sale to Royal Bank of Canada
Scores of protestors, led by the country's Federation of Independent Trade Unions (FITUN), attempted to block the sale but were unsuccessful. President of FITUN, David Abdullah speaking with journalists just before the final vote, accused the Trinidad and Tobago government of selling out the national patrimony.
He said, as a labour union that represents thousands of workers in the country, including those at RBTT, they were not in agreement with the sale of that which belonged to the people of the country.
Abdullah, who met with several shareholders, said he was assured that many of them were against the sale of local RBTT to the Royal Bank of Canada.
Meanwhile, despite concerns about the sale of RBTT, officials at the bank are maintaining that it was a good deal.
RBTT's CEO Suresh Sookoo, also speaking with journalists said it was a good transaction considering that the Royal Bank of Canada had a good world rating.
"One of the things that's going to happen is that once the transaction is closed, the rating of the institution is actually going to jump upwards because RBC is rated 'Double A' by S&P, RBTT the financial holdings is rated 'Triple B Minus'. So immediately based on the ownership by RBC the rating of RBTT or their subsidiary will in fact jump substantially. What that means is that you have a bigger bank that is backing your Roytrin Product. There is to be no change to Roytrin. In fact we are hoping to leverage the capability of RBC to bring better assets to put into the Roytrin Fund that can enhance returns," said Sookoo in an interview.
Sookoo also responded to claims of possible capital flight or the fact that persons may take their investment from the bank moving it outside Trinidad and Tobago as a result of the transaction.
He said that, while this is a risk, it had to be balanced with how much of the operation's head office policy will be dictated in Trinidad and Tobago.
Source: CaribbeanNetNews
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