Power’s out
Wednesday January 26 2011 | 03:14 AM

Control of Barbados' lone electricity generating company is virtually in Canadian hands.

In an arrangement that will see it forking out about $180 million in cash by next Monday, Canada's Emera Inc. is on course to gain controlling interest in Barbadian company, Light & Power Holdings Limited.

Following yesterday's closure of an offer to purchase all of the common shares in the parent company of Barbados Light & Power Company Limited, news out of Toronto today was that the energy and services company would increase its stake of LPH to almost 80 per cent after a large number of shareholders here agree to sell theirs at $25.70 each.

But it was also disclosed that those holding onto their shares included the National Insurance Board.

Emera Inc. said "7,129,269 shares of LPH were deposited in response to the offer" and that its intention was to "purchase all deposited shares".

"If the tender and acceptance of all shares is confirmed by the Barbados Stock Exchange as valid, this will increase Emera's ownership in LPH to 79.74 per cent," the company said.

"This 41.43 per cent additional investment will make Emera the majority shareholder in LPH. The remaining shares of LPH are primarily held by 1,700 Barbadian shareholder accounts, including the National Insurance Board of Barbados."

It added that "payments for deposited shares will be made to shareholders by January 31, 2011. The transaction is expected to close in the first quarter".

All along the North American entity has been saying it is happy with the management of the Barbadian company, but sources said today that with this latest development, it was likely that the composition of the LPH board would be changed with the number of directors reflecting the change in ownership.

Additionally, it was expected that more of the shots now being called in Bridgetown would be called in Toronto.

LPH currently does the majority of its business through its subsidiary BL&P which supplies electricity to 120,000 Barbadian customers. The company earned $28 million in profits in 2008.

The way for Emera to get its hands on the shares it sought was cleared recently after the directors of LPH advised shareholders to sell their shares.

This was communicated in a circular attributed to Company Secretary Dr. Hartley Richards, which informed shareholders, including the National Insurance Scheme and regional finance giant Sagicor, that the directors who owned shares had decided to accept the $25.70 and that they should do likewise.

Barbados TODAY understands that the decision to sell had been the subject of intense discussions among the National Insurance Board's directors, but in the end a decision was made to hold onto the stock, "for strategic reasons", although Government, through the NIS, stood to net more than $102 million from the sale of its almost four million shares. Sagicor Group also owned 1.3 million, but there was no indication from Sagicor or Emera on what direction that financial institution had decided to go.

Some shareholders had been against the advice from the LPH directors to sell and it is understood that a number of them refused to follow the directive, which was also criticised by chartered accountant and head of the Barbados Association of Corporation Shareholders, Douglas Skeete.

Emera's director of corporate communications had said the move to go after the LPH shares had been influenced by some shareholders who wanted the benefit of the identical $25.70 per share offer the Canadian enterprise made when it purchased its previous 38 per cent stake in the Barbadian company in May last year from another foreign company Leucadia.