ECAMC » asset management

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Asset Management

Article 10 of the ECAMC Agreement prescribes that the ECAMC may, with the consent of the seller, acquire any asset through vesting; or acquire any asset through other means pursuant to the provisions of other applicable Laws. Further, Article 54(2) of the ECAMC Agreement prescribes that the ECAMC shall acquire these assets at market value and the market value shall be determined by an independent expert appraisal based on a representative sample of assets that are eligible for acquisition and on recent appraisal values as the case may be.

In furtherance of the aforesaid, Article 9(1) of the ECAMC Agreement provides that the Eastern Caribbean Central Bank Monetary Council (the “Monetary Council”) on the recommendation of the Eastern Caribbean Central Bank (the “Central Bank”) determines classes of licensed financial institutions as approved financial institutions (“AFI”) with whom the ECAMC is authorized to acquire assets from. In this regard, at its 89th meeting held on 20 October 2017, the Monetary Council approved twenty-four (24) licensed financial institutions with whom the ECAMC can carry on the business of asset management.

The list of the financial institutions approved by the Monetary Council is as follows:

MEMBER STATE	NAME OF APPROVED FINANCIAL INSTITUTION
ANGUILLA	National Commercial Bank of Anguilla Ltd Republic Bank (Anguilla) Limited
ANTIGUA & BARBUDA	Antigua Commercial Bank Ltd ACB Mortgage and Trust Company Limited Caribbean Union Bank Ltd Eastern Caribbean Amalgamated Bank Limited Finance and Development Company Limited FirstCaribbean International Bank (Barbados) Ltd
COMMONWEALTH OF DOMINICA	National Bank of Dominica Ltd Republic Bank (EC) Limited
GRENADA	Grenada Cooperative Bank Ltd Republic Bank Grenada Ltd ACB Grenada Bank Ltd
MONTSERRAT	Bank of Montserrat Limited
ST KITTS AND NEVIS	FirstCaribbean International Bank (Barbados) Ltd Republic Bank (EC) Limited St Kitts-Nevis-Anguilla National Bank Ltd TDC Financial Services Company Limited The Bank of Nevis Ltd
SAINT LUCIA	Bank of Saint Lucia Limited Capita Financial Services Inc East Caribbean Financial Holding Company Limited Financial Investment and Consultancy Services Limited FirstCaribbean International Bank (Barbados) Ltd Republic Bank (EC) Limited Sagicor Finance Inc 1st National Bank St Lucia Limited
ST VINCENT AND THE GRENADINES	Bank of St Vincent and the Grenadines Ltd Republic Bank (EC) Limited St Vincent Cooperative Bank Limited 1st National Bank St Lucia Limited

Under Article 10(6) of the ECAMC Agreement, the acquisition of assets shall be limited to a period of two years from the date of commencement of business by the Corporation on July 21, 2017. However, the ECAMC did not acquire assets because during this initial 2-year period the institutional framework was being developed, including the establishment of the eligibility criteria for the acquisition of assets. The key eligibility criteria are as follows:

a. The assets must be commercial.

b. The outstanding principal balances of the assets must be EC$300K and above; and

c. The assets must be adequately collateralized, and the security should be transferrable.

Considering no assets had been acquired and the initial 2-year acquisition period expired an extension of the acquisition period was granted for an additional year to October 2021. However, the ECAMC did not meet this deadline due to varied challenges and ongoing negotiations with the AFIs to reach pricing agreements. In this regard, a further extension was granted which will conclude in July 2023.

The acquisition process involves the AFIs identifying a portfolio of assets they wish to offer to sell to the ECAMC. The ECAMC conducts a due diligence assessment in accordance with its Asset Acquisition Policy and Procedures Manual. Upon completion of this assessment, ECAMC enters into a Purchase and Sale Agreement (“PSA”) with the AFI. Following the execution of the PSA, the assets are legally transferred to the ECAMC by way of Vesting as outlined under the ECAMC Agreement.

Acquisitions To Date

As of 30 June 2022, the ECAMC had acquired assets from four (4) AFIs at a total acquisition price of EC$9.1 million, an overall discount rate of 40%. Further, an additional portfolio of assets totaling EC$3.4 million was under consideration for acquisition. Table 1 below (Asset Acquisition by AFI and Member State) summarizes the Corporation’s position by AFI and Member State:

TABLE 1 – Asset Acquisition by AFI and Member State

Approved Financial Institutions	Member State	Number of Loans	Number of Debtors	Number of Collateral Properties	Percentage of ECAMC Portfolio
Bank of St Lucia	St Lucia	7	4	5	0.28
Bank of St Vincent and the Grenadines	St Vincent and the Grenadines	7	6	6	0.28
National Bank of Dominica	Commonwealth of Dominica	10	6	10	0.40
TDC Financial Services	St Kitts & Nevis	1	1	1	0.04
TOTAL		25	17	22	1.00

Management of Assets Acquired

Following the acquisition and onboarding of the assets, ECAMC utilizes various strategies to manage these assets, which include:

1. A Quick Recovery Programme

2. Loan Restructuring;

3. Loan Sale;

4. Sale of the Collateral Property; and

5. The appointment of a Special Administrator/Injection of capital expenditure (if necessary).

Debtor Engagement

Subsequent to the acquisition and onboarding of the assets, and in accordance with Article 14(3) of the ECAMC Agreement the ECAMC shall make reasonable efforts to notify at the last known address of each debtor, associated debtor, guarantor, or surety in relation to the acquisition and management of the asset. By way of a Notice of Acquisition letter, each debtor is requested to submit a business plan as well as financial statements, three years’ financial projections, and a proposal detailing how the asset will be repaid.

Following ECAMC’s review of the contents of the proposal submitted by each debtor, the ECAMC either offers a compromise settlement (Quick Recovery), enters into a loan restructure arrangement with the debtor, or proceeds with enforcement action. It MUST be noted that the latter is applied only:

in cases where the debtors are unable to prove that they could meet their loan obligations (even if restructured) or,
where they fail to co-operate with the terms of the Notice of Acquisition.

Enforcement IS NOT ECAMC’s preferred option as its stated objective is to try and achieve a consensual payment agreement with all the debtors. However, in certain circumstances, enforcement is necessary to protect the value of ECAMC’s assets.

Disposal of Collateral Property Held by ECAMC

The Asset Management Department manages the disposal of property in accordance with its Asset Disposition Policy and Procedures Manual. The disposition of collateral properties falls under the following categories:

a. Real estate property which comprises land and building.

b. Developed and undeveloped land.

c. Commercial properties.

d.Residential properties.

About ECAMC’s Disposition Strategy

ECAMC was created to efficiently resolve the non-performing assets of AFIs within the Eastern Caribbean Currency Union (“ECCU”) region. By virtue of the ECAMC Agreement enacted by the member states, the Corporation is empowered to dispose of managed properties to fulfill its functions and objectives.

In managing the assets, the underlying properties which secure these assets may become available for sale. Click on the following link for the list of the properties that are available for sale and upcoming auctions. In disposing of properties using a competitive bidding process, the Corporation shall ensure that the disposal of the property is conducted:

a. In accordance with the Asset Disposition Policy and Procedures Manual;

b. At an arm’s length approach and in a commercially reasonable manner.

c. In a transparent manner;

d.In a manner that ensures the realization of the long-term economic value of such managed asset; and

e.In the best interest of the ECAMC.

All collateral properties must be openly marketed for sale and will be advertised in the daily newspapers, on ECAMC’s Facebook page and its website, and on any other medium available to it. The primary methods of sale to be used by the ECAMC are:

a. Sale by Public Auction,

b. Sale by tender/competitive bidding; and

c. Private Treaty/Agreement.

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asset management

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Lorem ipsum dolor sit amet, consectetur adipiscing..

Asset Management

Acquisitions To Date

Management of Assets Acquired

Debtor Engagement

Disposal of Collateral Property Held by ECAMC

About ECAMC’s Disposition Strategy

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asset sale monitoring

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asset sale monitoring