Business Bites
by Richard Coulson
First published in The Tribune February 15, 2018
Immigration-i.e. Haitians
The headlines about the round-trip of Jean Romy Jean-Charles, and his continuing uncertain certain legal status, tell us again how much we worry about ONE Haitian found in our country. Brits or Swedes or Poles don't bother us , but over 11,O00,000 Haitians loom less than 200 miles from our nearest border, en-route to Florida, dwarfing our 400,000 Bahamians -who may include already include as many as 60,000 of our neighbors already living here, legally or legally.
Not only nearby, but POOR!, so desperate that they arrive by wrecking their decrepit craft on our beaches, crammed by the hundreds into wooden shells . A recent lecturer here from Europe cited figures forecasting that while the population of emerging markets will increase by 3.6 billion by the end of the century, in the rich countries it will grow by just 32 million. Facing those numbers, exclusionary policies just don't work to staunch the flow from poor to affluent, from sub-Sahel Africa crossing the Mediterranean to the coasts of Europe.
Will Haiti exert similar pressures on our country? Both Government policy and our personal views seem mesmerized by this fear. So what's our solution? More detention centers, more barbed wire? More police taking time to check documents before mass round-ups? More 100-foot patrol boats that run aground navigating our shoals? More chartered aircraft for forced repatriation? All to see it happen again and again? It might be feasible, but at what cost? - both in money spent weakening our budget and in human rights violations staining out Christian reputation.
Few hard facts justify our fears. Population is projected to rise annually at 1.2% per annum to a total of 475,000 in 2040. Twenty-five per cent of the growth is forecast to come from immigration, and a substantial share will certainly be Haitians. But our Department of Statistics shows net immigration of only about 400 people per year, and only 10% of births are to non-Bahamian mothers -hardly enough to undermine our proud cultural heritage.
I have heard innumerable apocryphal stories that Haitians overwhelm our free public services . But a Larry Smith "Pundit" column from 2010 shut the alarm bell, reporting that 8.8% of school children were Haitians, as were 11% of Hospital admissions, while 12,500 were registered at N.I.B contributing $3.5 million while receiving only 1.8% of benefits.
Most able-bodied Haitians apply for work permits, but it cannot be seriously argued that they steal jobs from Bahamians. They do not commit our prominent murders, and cannot be traced to terrorism or money-laundering.
Their real negative is simply the personal stigma of shabbily dressed foreigners who struggle with our language. Forty years ago a leading white mogul confided in me, "Of course I love the black man- I deal with him every day. But he can't run a business!". That's how blacks of today often feel about Haitians. And they too will be proved totally wrong.
The evolution could come much faster if we shifted every dollar spent on apprehension and expulsion to education and job training -surely giving a much higher return on investment in human capital. I once enjoyed a bouyant celebration at a major Haitian church in Southeast Nassau. Despite my limited Creole, I could chat with families who were sporting their Sunday best on the weekend break from labor-with or without work permits.
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Aliv Unveils
No longer can ALIV be called secretive. It has just published a superb document that tells everything but the ages of Director Ross McDonald's two dogs. It's the polished and professional 99-page Private Placement Memorandum (PPM) for the $15 million of 8% 10-Year Preference Shares to be issued by local company Be Aliv Limited and placed by RoyalFidelity. Someday it could be the template for a public offering.
Prospective "Accredited Investors" can focus on the key points, that show ALIV as a start-up venture, now nearly two years old, competing with BTC for the country's mobile telephone business, already making an impact with individual users and now heading for the business market. It's no fly-by-night: it was capitalized at about $136 million, provided by Government, with 51.75% of the equity, and Cable Bahamas, with 48.25% and the management contract, and has raised about $80 million in debt financing. It's now fully operational in six of our major islands and soon to open in three more. It estimates its present market share as about 29% of potential users and is aiming towards 50%.
Like any start-up requiring heavy initial investment, the PPM's comprehensive "Investment Risks" makes clear that ALIV is not yet profitable, with negative net income, raising the obvious question about servicing the new Preference Shares. As long as revenue increases and EBITDA (basically, cash flow) continues its upward path reaching a projected positive level in 2019, the objective should be met, guided by the wide experience of ALIV's senior executive cadre leading its 186 non-union employees.
Of course, investors must be aware that the Shares are subordinated to all ALIV's present debt, and note the full disclosure that a senior bank loan is planned, a five-year credit of $19.5 million to be secured by a lien on all the company's assets.
These factors are compensated by the dividend rate of 8%, compared to interest less than 3% on the latest Government bond issues, our closest approach to a risk-free security. A subscriber to $50,000 of Shares (the minimum) will receive a $2,000 dividend semi-annually for the first five years, and for the last five years annual principal repayments of about $10,000 plus dividends on the declining principal -an attractive return in these days of minuscule interest on bank deposits.
This financing has no direct bearing on the equity net worth of ALIV, a question of great interest to Cable Bahamas and its thousands of BISX shareholders. That will only be resolved when Government, at last, gets around to selling its roughly $70 million ALIV equity stake held through its opaque HoldingCo2015 Limited..
How that's done will have to await a future column.
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Where are Tourism Boosts?
Ministers Symonette and D'Aguilar, businessmen now in Government, have both hit on the private sector for not doing more to encourage tourists to circulate in downtown Nassau-and incidentally to make urban life more fun for us residents.
A good start now has been announced with Government's approval of a harbor- front boardwalk to be built and funded by a group of private property owners. Twenty years ago I took the photos for a Tribune supplement illustrating the dilapidated eyesores still standing in this Zombie Zone. In my next column I will point the finger at what can be demolished, rebuilt, renewed or beautified, with the stimulation of a teeming boardwalk.
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Our Leaders at Night
The Cable Beach spot favored by our sharpest dudes and foxiest chicks was playing host to two famous retirees enjoying the music-separately. At a table by the window presided Perry, now leaner and calmer, while waaay down the bar Hubert the First wagged his sturdy jaw. Pressing the flesh is what they love, in or out of office.
There was no sign of Hubert the Second. It seems the worthy Doc has little taste for night-time cavorting. Too busy writing long speeches a bit short on charisma.
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Mr. Coulson has had a long career in law, investment banking and private banking in New York, London, and Nassau, and now serves as director of several financial concerns and as a corporate financial consultant. He has recently released his autobiography, A Corkscrew Life: Adventures of a Travelling Financier.
