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Capacity Building for Asset Management in Honduras

Project Development Objective (PDO)

The main objective of this technical assistance is to strengthen the capacity of the Honduran Office of Seized Assets to efficiently manage seized assets, minimize government liabilities, and mitigate the impact of failed companies on the Honduran economy and the stability of the financial sector.
 

Background

In regard to the liquidation of financial conglomerates in Honduras, this project aims to (a) mitigate the impact on the Honduran economy, (b) limit potential fiscal liabilities, and (c) minimize the impact on the stability of the financial sector. Thus it is critical for the Honduran Office of Seized Assets (OABI), when it seizes companies, to have a process both for identifying companies’ financial situations and for determining the best course of action to salvage any remaining value. Some companies are insolvent, but others may have residual value and may continue to be financially viable after restructuring. Restructuring viable corporates is critical to preserving jobs and the economic fabric of Honduras. When restructuring companies, the role of the OABI should be akin to that of a distressed asset management firm tasked with ensuring value for money for the government. 
Honduran authorities have asked the World Bank Group for technical assistance in establishing a process for efficient asset management. Asset management expertise is needed to (a) ensure value for money and limit potential fiscal liabilities and (b) mitigate the impact of failed financial conglomerates on the real economy.

Activities

The project will implement the following activities in two phases: 
Phase 1: The first phase will consist of the establishment of a framework to deal with seized assets.
Phase 2: The second phase will build the OABI’s capacity to implement the framework and to effectively manage seized assets once they are categorized.

Expected Outcomes

The main expected outcomes of the project are as follows:
1.    Establishing a clear framework (policies, procedures, action plans) to deal with seized assets 
2.    Implementing approved action plans in a timely manner
3.    Improving the OABI’s asset management expertise