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The government of Antigua and Barbuda is threatening to block part of a deal reached by Canadian Imperial Bank of Commerce to sell its Caribbean business to Colombian billionaire Jaime Gilinski Bacal.

CIBC announced Friday that it has reached an agreement to sell a majority of its investment in Barbados-based CIBC FirstCaribbean International Bank to Mr. Gilinski’s GNB Financial Group Ltd. for US$797-million.

GNB will own 66.7 per cent of FirstCaribbean’s shares, while CIBC will retain 24.9 per cent. The remainder of the shares are held by other minority investors.

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Ronald Sanders, high commissioner to Canada for Antigua and Barbuda, said Friday that his country is concerned about including FirstCaribbean’s operations in Antigua in the sale, and will not grant an order allowing the transfer unless CIBC addresses the government’s issues.

While FirstCaribbean is based in Barbados, it has operations in 16 countries in the region, which means multiple jurisdictions must approve the transaction.

Mr. Sanders said Antiguan Prime Minister Gaston Browne has spoken with a CIBC official and warned that Antigua will enforce its requirements that owners of banking operations must attempt to sell them to local buyers whenever possible.

“It remains the government's policy that the sale of any foreign bank should first be offered to local financial institutions in order to strengthen their capacity and resilience,” Mr. Sanders said in an e-mailed comment.

He said Mr. Browne has also told CIBC that the proposed sale method is “an attempt to circumvent the regulations and laws” that govern bank sales in Antigua.

“In this connection, the government of Antigua and Barbuda will grant no vesting order for this sale unless and until it is provided all the facts, analyzes all the pertinent information, and is satisfied that the economic and security interests of the country, its financial system and its continued participation in the global financial and trading system, are safeguarded and can be advanced,” he wrote.

CIBC said Friday it had no comment.

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Bank of Nova Scotia faced opposition from the governments of both Antigua and Guyana earlier this year after it unveiled plans to sell its operations in nine Caribbean countries. Scotiabank announced earlier this month that it would proceed with sales in seven countries, but scrapped plans to sell its units in Antigua and Guyana.

GNB is owned by Starmites Corp., the financial holding company of the Gilinski Group. The Gilinski Group already has banking operations in Colombia, Peru, Paraguay, Panama and Cayman Islands with about US$15-billion in combined assets.

Under the deal terms, CIBC will receive US$200-million in cash for the purchase and will provide secured financing for the remainder of the price.

CIBC said it will record an after-tax loss of $135-million in the fourth quarter of 2019 because of the reduction in the value of goodwill it is carrying on its books for FirstCaribbean. The bank said it will realize accumulated foreign currency gains of $280-million.

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