Strategy

The principal strategy of the Company since its incorporation in 1995, has been to be exclusively dedicated to making investments in or with Cuban businesses. This policy remains unchanged and management believes that this will result in long–term capital growth. The other principal strategies are the following:

Balanced Focus on Established, Revenue–Producing Assets and New Development Projects

The Company’s strategies include maintaining a balance in its investment portfolio between established, revenue producing assets in the Company’s main operating segments, as exemplified by the Company’s indirect interests in the Miramar Trade Center and the Hotels, on the one hand, and new development projects, refurbishments and other capital investments that will contribute to long–term capital growth, on the other hand.  Under this strategy, the Company has invested in existing Cuban joint venture companies that own mature assets, as well as in new development projects.  CEIBA believes that this will provide stable and sustainable cash flows, with a strong potential for future growth.

Remain the Principal Foreign Investor in Cuba’s Commercial Real Estate Sector

CEIBA’s strategy regarding commercial properties is to remain the principal foreign investor in Cuba’s commercial real estate sector through the addition of new properties within the Cuban joint ventures in which it already has an interest, whether by acquisition or new construction.

Remain a Leading Foreign Investor in Cuba’s Tourism Real Estate Sector

CEIBA intends to continue to be one of the leading foreign investors in the tourism real estate sector by maintaining a portfolio of investments in high–end (4 and 5 star) hotels located in Cuba’s main tourist and business destinations.

Investment in other Prioritized Sectors of the Cuban Economy

Given the present efforts of the Cuban government to modernize the Cuban economy, the Company will consider investment opportunities in new sectors of the Cuban economy prioritized by the Cuban government as such opportunities present themselves.

Be Flexible in the Deployment of Cash Flows

The Company’s interests in commercial real estate and hotel properties provide revenue streams that may be utilized for new acquisitions, investments in the development of new properties, upgrading of existing properties or the payment of dividends to shareholders of the Company.  Given the time necessary to obtain all government approvals and to construct new projects in Cuba, one of the Company’s main focuses in the last five years has been to generate stable and sustainable cash flows.  At the same time, the Company also intends to continue to invest in Cuban joint venture companies that are in the process of developing commercial real estate and hotel projects.  The Company believes these development projects have the potential to create long–term capital growth for the Company’s shareholders.  The Company invests surplus funds in interest–bearing structured finance transactions and other financial instruments and commercial paper relating to Cuba.  The Company seeks to structure the repayment terms of such facilities to approximate the time when funds will be required for future investment requirements of new and current investments in Cuban joint venture companies.

Use Leverage Prudently and Optimize Capital Structure

The Company is debt–free, both at the holding company level and at the level of each underlying investment, including the Cuban joint venture companies in which the Company has an interest.  The Company believes that the absence of debt provides the Company with the ability to leverage its assets in the future, should the cost and other conditions for debt financing for Cuban assets become more acceptable, thereby allowing the Company to optimize its capital structure and to make further investments or to return capital to shareholders.  The future capital structure of the Company will be dependent on the cost and availability of debt financing, the ability of the Company to develop or acquire new investment projects and the continued improvement in local market conditions.