Herzfeld Cuba Fund and other post Castro post Embargo business opportunities in Cuba
Posted: 25 April 2008 01:34 PM   [ Ignore ]
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Here’s a great article about the business possibilities in a post Castro post Embargo Cuba from RightSideAdvisors.com

By Judy Alster

When Fidel Castro announced his retirement a couple of months ago, a lot of people started wondering when Cuba would be open for business. The American embargo on the island is almost 50 years old and the fervent hope is that Fidel’s brother Raul might free Cuba’s economy, allowing genuine private investment and a return to some form of capitalism. One thinker on the subject, Graeme Wood, thinks some industries should benefit significantly when and if private investment returns to Cuba.

For decades Cuba’s construction materials, for examaple, have all gone to the military (for all those big world wars Cuba has been engaging in, I suppose) and as a result, Havana, once a famously beautiful city, has been falling apart for years. Brownouts are common, sewage flows untreated into the sea and fresh water is far from plentiful, so there’s big opportunity for infrastructure companies should the time come. Housing developers and hotel and casino chains, and builders in general, will be interested in staking claims, as will big-box stores: Cubans haven’t been able to comfortably go shopping since the 1950s and that’s a lot of pent-up consumer demand. U.S.-based cruise lines will be lining up to dock at the marina. Cars, trucks and buses are in painfully short supply; so is hospital equipment.  Already a Chinese-Israeli partnership is thinking of building a massive convention center to lure trade shows away from the U.S. mainland.  And given Cuba’s educated work force and low-wage labor, pharmaceutical manufacturing could take hold as it has in Puerto Rico.

FYI, one fund invests in companies likely to profit from an open-for-business Cuba: the Herzfeld Caribbean Basin Fund (CUBA). It’s not a position in any of the four 21st Century Investor Portfolios and it’s too speculative even for me in an aggressive mood; I submit it purely for your further due diligence. The announcement of Castro’s retirement sent shares up over 25% as investors rushed to get in. But the jump in the share price wasn’t matched by a rise in the fund’s investments, and the shares fell; now they’re rising again. The fund has a very high year-end payout but so far the share price has barely recovered from the last post-dividend drop.  Herzfeld Caribbean is invested in regional companies in a dozen or so countries throughout the region that could gain if Cuba welcomes business, including food and shipping, water purification, cruise lines, marine freight, orthopedics, banking, communications and conglomerates. There are no Cuban assets since the fund isn’t allowed even to own land. It does have some old bonds now worth nothing, although Cuba could redeem them at partial value, which is something other third-world countries have done to reassure potential investors.

When all the excitement subsides, we could still be a very long way from a Havana Stock Exchange. Raul could live for years and there’s no guarantee that the island’s subsequent leaders will embrace capitalismo. Cuba would also have to take other steps before Congress lifts the embargo, like holding free elections (How do you say “Ha, ha” in Spanish?), freeing political prisoners, and restoring a few basic human rights. The island could start welcoming trade by Christmas, causing the fund to skyrocket . . . or by 2028.  Eventually, Cuba will open up.  For now, Herzfeld Carribean Basin is for investors with a combination of throwaway money, saintly patience and carborundum nerves.

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Posted: 25 April 2008 02:02 PM   [ Ignore ]   [ # 1 ]
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Found this too…

Corporate stakes in Cuba - Is the future brightening for U.S. pre-Castro claims?
By Telis Demos | FORTUNE

After Fidel Castro announced that he was resigning the presidency of Cuba on Feb. 19, shares of OfficeMax rose 12%. The reason? It has a claim worth $2.5 billion dating back to when its property there was seized in the wake of the 1959 revolution. Similar claims made by nearly 6,000 companies are currently valued at $20 billion, and U.S. laws require all claims to be settled before trade can be normalized.

U.S. companies are not looking for a check, however, according to Patrick Borchers, an international-law professor at Creighton University, who studied the issue for USAID: “[They want] assets back or replacement assets or development rights.”

While the office-supply chain, OfficeMax, no. 288 on the 500 list, was never in business in Cuba, it came to own Cuba’s national electric company through a merger with papermaker Boise Cascade. Boise had earlier bought a Florida company with a stake in Cuban Electric.

Other claimants paint a picture of pre-Castro consumer life: Colgate-Palmolive, maker of the island’s most popular toothpaste;Coca-Cola, whose soda machines were ubiquitous; and GM, maker of the ‘50s-vintage cars still being driven around the island. A predecessor of Exxon Mobil owned an oil refinery, and Chiquita Brands bought a firm that owned fruit orchards.

One company that’s been particularly interested in updating its claims is Starwood Hotels. In 1998 the global hotel group acquired part of a claim worth $1.4 billion when it bought a piece of the ITT conglomerate, which had owned a radio station in Cuba. Then, in 2005, after a former ITT manager in Cuba contacted the company, Starwood asked the Justice Department to recognize an additional claim of $51 million worth of land near the Havana airport and on the ocean. It was approved in 2006, but don’t book your room yet.

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Posted: 12 November 2008 07:56 PM   [ Ignore ]   [ # 2 ]
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To think that Office Max has any rights to property in Cuba is a nonsense.

There are certainly complex property issues to be resolved ... but these should be limited to private individuals who have lost their family homes and they should be compensated in some way or another ... but to continue persueing the claims of large multinationals which now include the likes of Office Max who have never traded in Cuba… and making these claims part of the conditions to liftt he embargo is a total nonsense. If/when the people of Cuba emerge from the shadows of the Castor brothers is it really fare to straddle them with debt to repay these multinationals (which include companies such as texaco and Bicardi) who have written off their assets long a go.

Also - to make resolution of any property claim a conditon of lifting the embargo is hipocrasey and is meddling in the affars of cubans.

I do not remember Ronald Regan standing at the Berlin wall shouting ... “Gorbechov tear down this wall after you have resolved all the property claims first”

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Posted: 18 November 2008 05:20 PM   [ Ignore ]   [ # 3 ]
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hahaha very funny indeed, is kind of silly thinking that there’s anything to clain after 50 years of abuse

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Posted: 30 August 2009 08:23 PM   [ Ignore ]   [ # 4 ]
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Yo, yous peoples talk a lot, but I can not find anyone who is willing to go down there and go to work and by the way, before we go there to seek our fortunes, lets make sure those people all have a roof over there heads and and something to eat. and that the political prisoners are released. You think your tourist hotels should come before that. You gonna build luxury hotels in a country that has blackouts everyday because they do not have enough power plants, where the sewer and water system is flowing down the streets. Everbody has big ideas, but no one is making plans.  Before you can do anything, you have to be able to unload the machinery off the ships in harbors where there is nothing left to unload them with. You have to haul the stuff to the highways on 1959 model streets at best.  You can not turn a semi pullin 250,000 lbs. of backhoe on a 42ft. detachable trailer in intersections where the streets are 24 ft. wide.  The power lines cross the street there not hanging to high so ya tear them down while you are at it. And member this, the pavement is not in such good shape to begin with. Course there might not be any pavement when you get there, because the streets all have to be dug up anyway to fix the sewer and water, and to put in new phone and electrical lines.  So anyway someone has to figure out how all this is going to be done and in what order. As smart as I am, it is gonna take even more smarter people than me. Ya ain’t gonna start building luxury hotels the day after the commies leave, first the real work has to be done. You gotta get rock crushers, pavers, dozers, concrete mills and all that stuff in place and going. You need logging machinery and log trucks and sawmills and trucks to haul the boards to town. You gotta have guys to hold on to the steering wheels of those trucks. Road maps would not hurt either. Parts distribiters and repair shops are nice that have sperienced chanics.You gotta get people from here down there to run the stuff and find them a place to stay in a country that does not have housing for the people that are already there. They do not need luxury hotels but they do need to eat. The rebuiling of Cuba will take more planning than the Normandy Invasion by people who know how to do this stuff, not by financial experts. Never know, if it takes a civil war to get rid of the commies things could end up in more worser shape than they are now.  You gotta do all this while the people there are trying to rebuild there own lives and after you finger out who owns what. I like to make money like the next guy, cept I like to make more, but I think schools hospitals and nursing homes are going to be needed before tourist hotels for the rich white people. Anyway I have been there and whent the commies are gone I will go there and live the rest of my life there because I wonna help. Any intellingent ambitious person who also wants to be a part of this, call me, BOO 715 896 4742 or .(JavaScript must be enabled to view this email address). By the way I aint sayin yall are stupid, but how come there are not Cuban Americans on this forum. Tell you why, cause this is there country and these people are countrymen. Cuba aint your resort and it aint your industrial park. That comes later. but we might be dead a old age by then. I just hope they bury me in Cuba.

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Posted: 01 September 2009 09:41 PM   [ Ignore ]   [ # 5 ]
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And another thing gambling is not an industry it is a vice. Casinos are like car dealeships, honest people do not own them. People who work in casinos are working for organized crime. Legalized gambling is what got Cuba in this mess to begin with. You think the new government is going to legalize gambling just cause it was legal before. Cuba has incredible farmland, believe me I seen it myself. They got what is supposed to be the best cattle ranch country in the world and I am peep whos been on farms and round cows since I was born. Cuba got the richest nickel ore in the world. They got high grade iron ore in an iron range that rivals the Masave iron range in MN. They all ready got more high quality interstate highways than they will ever need and I know highway cause I usta build em and I seen the ones down there. There are airports and runways all over the place. Florida construction industry, I read is already planning on getting all there limestone out of Cuba someday, cause the quarrys in Florida are screwing up the viroment. And guess what? They got oil to beat hell. On and offshore. I can not figure out where on Gods green earth anyone would possibly get the idea they need a casino or a tourist hotel in Cuba. You gotta be sufferin from a mental condition like Acute Rectal Craniel Proximity Syndrom. My research has shown it is caused by to much education and not enough ambition. These people deserve real jobs, in real industrys. These people are not the garbge that moves to Vegas cause they can not make it at home. Let then Join the free world with pride.  You build cainos there and let Americans in, You will have crime, prostition, and panhandlers. Look at Vegas.  If anyone of you realy wants to do something rather than just kill time on the internet acting like you know something. Call me 715 896 4742 or .(JavaScript must be enabled to view this email address) I would like to get together with decent, serious, people sometime, maybe this winter have a meeting or a convention or whatever you call it here in beautiful frozen WI round January.  If it is here in January I will know the people that show are seriuos about this.  I appreciate Havana Journal and I do not want to get down on anybodys bad funky side to much, but wake up people! I wonder if Havana Journal could help me get a meeting of some kind goin. You peeps want a real education bout Cuba, Ya go ta Barnes and Noble or Borders and you look for Operation Pedro Pan The Untold Story, Havana Nocture, The Real Chel, or Wating for Snow in Havana. You read these books before you start talkin stupid.                                        I bet this shuts a lot of you up for a while.

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