Cuba fund going public on Toronto Stock Exchange

Cuba Standard.com/

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.

With an Initial Public Offering planned before the end of the year, the Channel Islands-based company wants to price its shares for an initial public offering at least at US$1.20, according to the company’s annual report.

In June, Ceiba terminated a three-year old agreement with its investment adviser and converted from a regulated close–end investment fund to an internally-managed investment company, while submitting an application to list its shares on Canada’s largest 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 the Toronto Stock Exchange, “a highly liquid international market,” Ceiba said in its annual report.

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 86-percent share in HOMASI S.A., a Spanish holding company that owns 50 percent of the Meliá Habana hotel; a 71.525-percent 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 over the past five years from other foreign companies. The company is completely debt-free.

Ceiba parks 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, and $2.5 million to Banco Internacional de Comercio S.A. Ceiba has loaned FINTUR money since 2002.

Ceiba declared a net profit of $13 million in March 2011, compared to a net profit of $528,000 in 2010.

The main shareholders and executives in Ceiba are Chairman Jaime García-Andrade, Chief Investment Officer Enrique Rottenberg, CEO Sebastiaan A.C. Berger, and Colin Kingsnorth.