Ceiba Investme. Regulatory News (CBA)

3 June 2019

CEIBA INVESTMENTS LIMITED

(TICKER CBA, ISIN: GG00BFMDJH11)

TRADING UPDATE

CEIBA Investments Limited ("CEIBA" or the "Company"), the largest listed foreign investor solely dedicated to investing in Cuba, is pleased to provide the following update on trading.

Q1 2019 Results

As announced on 29 May 2019, the Company's unaudited IFRS net asset value per share ("NAV") as at 31 March 2019 was US$1.5073 (31 December 2018 audited NAV: US$1.4937). This increase reflects US$1.9 million of net comprehensive income recognised during the quarter. This was principally attributable to US$3.4 million of dividend income received by the Company, net of non-controlling interests, from its equity investments in Cuban joint venture companies.

However, as a result of the strengthening of the British Pound during this period (GBP:US$ FOREX as at 31 March 2019 of 1.3053 compared to 1.2691 as at 31 December 2018), the unaudited IFRS NAV expressed in Sterling at 31 March 2019 was lower, at £1.1547, than as at 31 December 2018, £1.1770.

The non-IFRS unaudited NAV as at 31 March 2019 was US$1.5406 (31 December 2018: US$1.5288) or £1.1802 (31 December 2018: £1.2046). These figures include an adjustment recognising the full amount of US$5.0 million (£3.9 million) received from Aberdeen Standard Fund Managers Limited in connection with the execution of the Management Agreement (rather than deferring this amount over the five-year term of the Management Agreement as required by IFRS).

Strengthening of the US Cuban Embargo

The recent steps taken by the Trump administration to further strengthen the US Cuban Embargo, which has included limiting remittances, further restricting travel by US persons to Cuba and allowing Title III of the extraterritorial Helms-Burton Act to come into force, have resulted in a decline in US travel to the island and are expected to have a negative impact on the Cuban economy. In light of these aggressive steps, the Company is highly encouraged that Cuba continues to allow the timely transfer of hard currency to the foreign shareholders of the Cuban joint ventures in which the Company participates. The Company is also grateful for the immediate support provided by the European Union and various other countries in publicly repeating their long-standing determination that the application of Title III of the Helms-Burton Act is contrary to international law and confirming support for the companies under their jurisdiction having legitimate investments in Cuba.

The Spanish Cuban Debt Conversion Programme ("the Programme")

In April 2019, the Company announced that two Cuban joint venture companies in which CEIBA participates were awarded an aggregate amount of US$18.25 million under the Spanish Cuban Debt Conversion Programme. TosCuba S.A. (in which CEIBA has an economic interest of 40%) was awarded US$10 million in connection with the construction of the Meliã Trinidad Playa Hotel near Trinidad, Cuba, and Miramar S.A. (in which CEIBA has a 32.5% economic interest) was awarded US$8.25 million in connection with the Meliã Habana expansion project.

Under these awards, local currency invoices relating to services and materials received in Cuba in the course of the construction of the projects will be paid on behalf of the Cuban joint venture companies from Programme funds, thereby reducing the financing that CEIBA may have otherwise needed to provide. There is no obligation to reimburse funds awarded under the Programme.

In May 2019, TosCuba S.A. received the first US$2.5 million tranche of its award from the Programme.

Amended FINTUR Facility

On 31 May 2019, the Company amended its existing syndicated €24 million secured loan facility in favour of the Cuban finance company Casa Financiera FINTUR S.A. ("FINTUR") in order to extend to FINTUR a second tranche in the principal amount of €12 million, which will be repaid in instalments over 2 years. The Company's participation in this new tranche is €2 million. 

The Company has provided loan facilities to FINTUR since 2001 for a total aggregate amount of €140 million, which have been repaid in full without default. 

John Herring, Chairman of CEIBA Investments Limited, said:

"We are pleased by the Q1 results of the Company and the continuing progress being made with respect to our investment programmes. We are confident, notwithstanding the adverse recent steps taken by the US administration towards Cuba, that CEIBA's growing investment programmes will prove to be mutually beneficial to the Company and to the Cuban economy, Cuba and its people."

For further information, please contact:

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