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Cuba investment fund.

CEIBA Investments, a closed-end fund that invests only in Cuba, plans to list on the London Stock Exchange in June, a sign of growing interest since Fidel Castro was sidelined by illness, reports Reuters (April 3, 2008):

The fund, registered in the Channel Islands, said it raised its capital by 18 million euros (US$28 million) to 88 million euros (US$137.3 million) in a share placing that was 70% oversubscribed. CEIBA focuses on real estate development and tourism, said Sebastian Berger, a Dutch lawyer. It is the foreign shareholder of the Cuban joint venture that owns the Miramar Trade Center, Havana's main business district;

CEIBA's management is not betting on Cuba opening up to capitalism any time soon, though the lifting of US sanctions would likely result in a large increase in the fund's asset value. Investors include investment trust SVM Global, hedge fund Value Catalyst, pension funds and banks. For three years, the fund has had a yield of 6% to 8% and paid shareholders annual dividends of 6%. US investors cannot buy shares due to the US trade and financial embargo against Cuba;

The only other fund aimed at Cuba-related business is the Herzfeld Caribbean Basin Fund, which invests in US companies that stand to gain from an end to the embargo, such as shipping companies, holiday cruise lines and other Florida-based concerns. Share prices of the fund started in 1994 by Thomas Herzfeld fluctuated wildly when Fidel Castro fell ill in 2006 and disappeared from public sight, fueling speculation he was dead. Leisure Canada, a Vancouver company listed in Toronto, plans to develop hotel resorts with golf courses in Cuba, but so far no investment has been made;

CEIBA said it plans to invest US$36 million in a 290-room beach hotel near the colonial town of Trinidad and build an amusement park in Varadero, the main holiday resort, that will include a water park. A plan on the drawing board involves floating 22-room hotels off tropical keys on the south coast. Floating on water is one way to avoid any risk of US sanctions that penalize companies that invest in property confiscated in Cuba after Fidel Castro's 1959 revolution.
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Title Annotation:CUBA
Publication:Caribbean Update
Geographic Code:5CUBA
Date:May 1, 2008
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