Hedgeweek Exclusive: Cayman Islands shut down by Hurricane Ivan

Grand Cayman has been effectively shut down by the devastating force of Hurricane Ivan, and is not expected to re-open until next week at the earliest.


Calls made by the Hedgeweek team to the international offices of various fund administrators and law firms operating in Cayman, the world's leading offshore hedge funds administration jurisdiction, revealed that the hurricane brought with it a wall of wind, floods and rain that has left Grand Cayman without electricity, telephones and water supplies in many parts.


A curfew is in force from 6pm to 6am to help prevent looting and maintain order.


All businesses are shut until further notice. UBS, the largest alternative/hedge funds administration business on Grand Cayman, with some USD 70 billion under administration is closed until further notice, and is not expected to reopen until early next week.


The situation at UBS is mirrored by other fund administration groups on Grand Cayman. All these businesses are understood to have back-up facilities in mainland locations and the shut-down is viewed as a temporary setback.


One observer noted: "It is fortunate that the shut-down has occurred in the middle of the month, a relatively quite period for most administrators as fund NAV calculations are not due for another 2-3 weeks."


Leading Cayman law firms Maples and Calder and Walkers confirmed that their offices too were closed but both firms had put contingency measures in place and can be contacted via their London/international offices.


All government financial services agencies were also shut, including the Cayman Stock Exchange.


In a statement released yesterday, the Cayman Islands Government said:


"There has been extensive water damage to a number of buildings, but the vast majority remain structurally sound. The country's housing stock has also been impaired. The electricity supply, which was turned off before the hurricane hit, has been affected, and the electricity company is working to re-establish the lines and pylons. Mobile phones are now being reconnected.


"The Cayman Islands Government (CIG) is focusing on four priority areas:


1. Securing the storm shelters -- ensuring people are safe, warm and have food.
2. Clearing the roads of debris and restoring essential services.
3. Working with HMS Richmond and the Auxiliary Ship Wave Runner. Both ships are currently offshore, and the Captain of HMS Richmond is preparing the ship's helicopter to undertake a test flight. If the test flight is successful aerial surveillance will begin, allowing an effective assessment of priorities.
4. Ensuring safety and security. The police will be assisted by personnel of HMS Richmond."


"The supermarkets have supplies that have not been spoiled by rain or flood water, and will reopen as soon as possible. The CIG is working to reopen the banks and to ensure the economy begins to function as normal as soon as possible."


"The absolute priority of the Cayman Islands Government is to ensure the Islands get back on their feet. The Cabinet Secretary, Orrett Connor, said: "The Cayman Islands has picked itself up from hurricanes in the past. There is a tremendous team spirit here, and we are working together to rebuild and regroup. We are absolutely determined to be back in business extremely quickly."


"The Government is working to ensure continuity in the Islands' financial services industry and will aim for the tourism sector to be back in business as soon as possible."


"The airport is back in restricted use, with a Cayman Airways plane flying in from Miami this (Monday) afternoon. The Air Traffic Control tower is operational. There is no further update, at the moment, about the resumption of commercial flights.


"As soon as more information becomes available, the Cayman Department of Tourism's New York office will be disseminating this. Please DO NOT overload the already stretched resources of the Government and emergency personnel by trying to call the Islands directly for an update."


HE The Governor of the Cayman Islands, Mr Bruce Dinwiddy, and the Leader of Government Business, Hon McKeeva Bush both made radio addresses to the people of the Cayman Islands on Monday, September 13.


Mr Bush reiterated the Government's earlier statement that there has been no loss of life so far as is known at this time.


He confirmed that a curfew is in effect from 6pm to 6am, except for emergency services workers, for the protection and maintenance of good order.


He asked residents to avoid travelling on the roads during the daytime and that people remain in their homes or shelters.


Mr Bush assured the public that the restoration of all utilities is a priority for the Government and said that meetings were being held with all relevant agencies to this end.


Electricity should be restored to George Town within a few days, to ensure the continuation of business and commerce. Restoration of power to other areas will be worked on in stages, with the aim of achieving normalcy as soon as possible, he said.


Mr Bush went on to say that the port will be ready on Wednesday to unload supply ships that will be arriving.


He urged people to maintain a calm and positive attitude. "We have always survived and always overcome," he said.


"We have always done so with dignity, pride and enviable success, and we shall do so again," he added.


Readers interested in receiving further updates on the situation in Cayman posted by Cayman residents using mobile telephones to call friends abroad, should visit www.stormcarib.com


A sample of the current postings on the Cayman section of the site follows to give readers some idea of the extent of the damage:


"I spoke to Peter O'Neill at approx 3pm EST today, for approx 40 mins; he called on a C&W mobile. He had been out since 5.30am Cayman time driving around in his jeep and the following is what he told me:
-best part is people seem happy, big smiles, just thankful to be alive and to see their friends again, so spirits seem good.
-landline service restored at the Marriott (he was adamant this was true!)
-he said it looks like a nuclear bomb went off, debris everywhere, furniture in middle of streets, most houses along by-pass near king's gym had no roofs
-said it will be days with chainsaws, heavy equip etc. lots of work to do.
-shipping containers scattered randomly everywhere
-up to 50 ft boats still tied to portions of a dock scattered along roads
-happy to see aircraft over head
-navy ships just offshore
-parts of the island that were "there" no longer "there" i.e sunset house, southsound demolished, turtlefarm gone, lost of west bay destroyed-sorry no specifics
-NO DEATHS TO HIS KNOWLEDGE (doesn't mean there aren't any)
-widespread looting even during peak of storm
-the ocean still "HUGE"
-Most boats at sailing club washed off trailers, and are "gone"
- a collection of boats mingled together on the "ice machine" side of the
club house.
BUILDINGS:
-Butterfield house amazing, well intact
-Parkway still flooded, 5 ft h2o still there
-lime tree bay: boats on top of cars (lots flooding)
-Glass house destroyed, all windows gone
-Walker's House: fine, perhaps damaged cars in car park
-Bank of America severe damage, Tower bldg too
-old HSBC bldg corner of fort street mostly destroyed, one floor intact
-Hunter's Law Firm (forget new name) seems ok
-Offices where Quin & Hamson are seem ok.
-Courtyard marriott severe damage
-Poinsettia: D block no broken windows, bottom floor flooded to 4 ft, some
leaking 2nd floor. A & B units basically windowless except boarded ones,
bottom units in A all ok only 1 inch flooding
-CoastLinetowers South church st structurally intact
-Sappphire Sail boat, tirmaran, parked on someone's front lawn
-Admiral's Retreat structurally sound, 5 ft flooding to ground flr.
-Mariner's Cove: blocking Shamrock Rd, traffic re-routed through Patrick's
island, but it took over an hour so he headed back towards town
-Old Prospect Rd: 4 New Town homes badly damaged, furniture coming out
front door.
-Homes in south sound in rugby club area washed away on seaside.
-Ritz Carlton appears fine structurally, scaffolding still up
- And the piece de resistance: The dome is still up at the Captain's Bakery!"

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