Bermuda’s economy is set to get a boost from the cash windfall that flows from the $365 million sale of Ascendant Group.

The sale to Canadian company Algonquin Power and Utilities Corp was completed yesterday. Ascendant, the parent company of Belco, has about 2,700 shareholders, and they are in line for a windfall as a result of the $36-per-share sale.

Algonquin said the transaction would result in $200 million being injected into the economy.

The real estate market could be among the beneficiaries, either through property sales or smaller scale renovations and improvements, as those receiving a payout decide what to do with the money.

While some of the island’s financial institutions are encouraging Ascendant shareholders to consider investing their gains in managed investment portfolios.

Penny MacIntyre, partner at Rego Sotheby’s International Realty, said: “Some individuals I have spoken to have indicated they are looking to possibly upscale here into a newer or more modern home, either by renovating or buying.

“Others have said they may use it to pay off mortgages, or help family members or children with their real estate aspirations.”

Some business owners and entrepreneurs are considering premises such as warehouses and small to mid-sized office buildings. Ms MacIntyre added: “There are also persons who feel more cautious over concerns of the economy locally and globally as more businesses and nations struggle. These persons said they will replenish their savings and set aside funds given the uncertainty of the economy.”

Nathan Kowalski, who regularly contributes the column Financial Ramblings from The Rock in The Royal Gazette, and is the chief financial officer of Anchor Investment Management, said: “A ton of things could happen. People could take the money and buy a property, such as a rental property, to replace some of the income they have lost from the dividend from Belco.

“There could also be a chunk that is put into investments – the market has done pretty well. So it is probably a combination of the two depending on how people feel about the local real estate market.

“Even if only a portion of it goes back into the local economy in terms of real estate, fixing a house or a bit of additional spending money, it’s a very positive thing because it was just sitting there, waiting, unreleased. There’s a definite possibility that it will assist the local economy. How much of that comes back in and is not just recycled and saved is the question.”

Susan Thompson, agency manager at Coldwell Banker Bermuda Realty, said it was the perfect time for an influx of cash to the economy ahead of the holidays and in the wake of the Bermuda and US elections.

She said there had been a resurgence in property sales in the months following the end of the island’s shelter-in-place phase earlier in the year. And with people returning to the island and the arrival of digital nomads, she said it is anticipated there will be an increase in real estate sales “but not anywhere to the extent that we saw with the sale of Bank of Bermuda in the early 2000s”.

Ms Thompson added: “Some people may be upgrading their accommodations as fewer people are travelling and they are spending more intimate moments with family and close friends. This windfall of funds, may be just what is needed for those first time homeowners by way of a down payment/closing cost. And finally, some people will take advantage of a softer market by way of investment opportunities.”

Finance minister Curtis Dickinson, said: “The scale of the proceeds from the Bank of Bermuda sale to HSBC, versus Ascendant, are vastly different.

“We are an economy that has contracted as a result of the pandemic, and inasmuch as we are trying to create stimulus to create momentum in the economy, that I don’t have to borrow to support, I’m encouraging of it. I’m expecting there will be folks who get a windfall from this transaction will use some of it to fund painting of a roof, the replacing of windows, doors, or maybe (take) a staycation if they don’t want to travel, or shopping in town.

“I’m hopeful they will use a portion of the proceeds that can start to circulate in the economy and generate economic activity.”