Category: Article

Executive Order of 1 May 2026

In our update of 10 March 2026, we referred to an Executive Order, issued by President Trump on 29 January 2026, which states, amongst others, that Cuba poses “an extraordinary threat to U.S. national security”, and we outlined the decisions taken by our joint venture companies Miramar S.A. and TosCuba S.A. to temporarily suspend operations at one of three hotels in Varadero and considerably decrease the operations of the other group hotels by taking rooms out of operational inventory. That situation remains unchanged.

On 1 May 2026, the U.S. president issued another Executive Order further expanding U.S. sanctions against Cuba, in this instance targeting the activities of foreign entities that invest in or otherwise materially support the government of Cuba.

In its second section the Executive Order defines “Sanctionable Conduct” to include “… any foreign person determined by the Secretary of State, in consultation with the Secretary of Treasury” …. or vice versa, … “that operates or has operated in the energy, defense and related material, metals and mining, financial services, or security sector of the Cuban economy, or any other sector of the Cuban economy, as may be determined by the Secretary of Treasury, in consultation with the Secretary of State…”. The Executive Order also targets entities that have “materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, the Government of Cuba”. Section four of the Executive Order authorizes the Secretary of State to impose certain sanctions on foreign financial institutions that include investment companies, holding companies and subsidiaries or affiliates thereof. In addition, on 7 May 2026, additional sanctions were imposed on Grupo de Administración Empresarial S.A. (GAESA) under the authority of the most recent Executive Order.

Notwithstanding the fact that neither CEIBA Investments Limited, nor its businesses related to tourism and commercial real estate, have been designated under the Executive Order, there is a risk that such a designation could occur at any time. The Company does not have any assets located in the United States that might be subject to freezing or seizure. However, an expected consequence of the latest Executive Order is that maintaining normal operating relationships with banks, financial institutions and other service providers will become more challenging.

Management and the Board of Directors of the Company are closely monitoring events and consulting with advisors and other stakeholders to assess the potential implications of these actions by the United States government, and will provide further updates if and when required.

In our Update of 20 January 2026, we referred to statements made by U.S. President Donald Trump and Secretary of State Marco Rubio related to Cuba, including assertions that Cuba would no longer receive oil or financial support from Venezuela. In addition, in parallel, the U.S. administration increased pressure on other regular oil and gas suppliers to Cuba (in particular Mexico and Jamaica) to stop supplying oil products to Cuba and on 29 January 2026, President Trump issued an Executive Order, stating that Cuba poses “an extraordinary threat to U.S. national security”. With these measures, the U.S. government has imposed a full de facto oil blockade against Cuba. Consequently, in February 2026, Cuba ran out of Jet Fuel and major carriers like Air Canada, Air Transat, and WestJet suspended all flights to Cuba, at least until 1 May 2026 (the end of the tourism high season). As a result, tourist arrivals from Cuba’s most important source market for tourists came to an abrupt halt, which has substantially impacted the occupancy levels and operations of the hotels in which CEIBA Investments has an interest.

With a view to prevent operational losses and minimize the negative impact of the sudden drop in clients, Miramar S.A., our joint venture company that owns three hotels in Varadero and one hotel in Havana has decided to temporarily suspend operations at one of its three hotels in Varadero. In addition, TosCuba S.A., the joint venture company that owns the Melia Trinidad Península hotel, has drastically decreased its operations by taking rooms out of operational inventory. The Company expects that as a result of these temporary measures the joint ventures will not incur operational losses during the period that the oil blockade continues, although it is expected that cash flow will be reduced in the coming period.

The Miramar Trade Center office and retail complex in Havana in which the Company has an interest is presently operating in the ordinary course, assisted by its back-up generators. Occupancy levels remain in the high nineties.

On Saturday 3 January 2026, the United States military entered Venezuela and captured President Nicolas Maduro and his wife and extracted them from Caracas to New York. The raid reportedly caused 83 deaths, including 32 Cuban citizens. On 5 January 2026, Venezuela’s Vice-President Delcy Rodriguez was formally sworn in as interim President.

In the context of these events, U.S. President Donald Trump and Secretary of State Marco Rubio made various statements related to Cuba, including assertions that Cuba would no longer receive oil or financial support from Venezuela.

It seems clear that if the U.S. government is able to follow through on its stated intentions, this would have a serious impact on Cuba and by extension on the operations of the Company.

Management and the Board of Directors are closely monitoring events and will provide further updates if and when required.

On 4 March 2025, in the presence of Cuba’s Minister of Tourism, Juan Carlos García Granda, the Meliá Trinidad Península Hotel and its employees received various awards in the context of the national “Workers of the Hotel and Tourism Industry Workers Day” for the outstanding contributions of hotel employees in cocktail and gastronomy events.

In addition, on 6 March 2025, the Hotel was awarded the prestigious National Energy Efficiency Award 2025 by the Cuban National Office for the Rational Use of Energy for its significant positive results in the application of solutions for the efficient use of energy, renewable resources and care for the environment in the services and tourism sector of Cuba.

We congratulate the management of the Cuban joint venture company TosCuba S.A. for having constructed an exemplary state-of-the-art hotel, and the staff and management of the Hotel for the important recognitions that they received.

On 20 October 2024, Management reported on the collapse of Cuba’s electrical system and the (then) projected landfall of hurricane Oscar on the North-East coast of Cuba. Below, an updated report.

Electricity Restored

As reported in the international press, Cuba’s entire electrical grid collapsed on Friday 18 October 2024.  The national grid was restored on Tuesday afternoon, in the fifth day of the crisis.  The entire population of the island and all businesses were affected by the outage, as were many other public services such as the supply of water and access to telecommunication services.

As previously informed, the Miramar Trade Center and the hotels in Havana, Varadero and Trinidad in which the Company has an interest were amongst the least affected and were all able to maintain principal operations, with limitations, thanks to installed back-up generators and – in the case of the Meliá Trinidad Península Hotel – solar panels and battery packs that make this hotel nearly self-sufficient.

Power from the grid was restored to the Miramar Trade Center and the Meliá Habana Hotel early on Monday morning, 19 October 2024, and to the Varadero Hotels and the Meliá Trinidad Península Hotel on Tuesday, 20 October 2024. We believe the managers of the hotels and hotel staff, as well as the joint venture companies, did a commendable job in maintaining as many services as possible and minimizing the impact of these difficult circumstances on the experience of hotel guests and clients of the Miramar Trade Center.

Notwithstanding the above, recent events have made it clear that Cuba’s electrical infrastructure is in a precarious state. Generation capacity is significantly below the total demand of the country and major investments are needed to maintain, modernise and increase the capacity of the existing infrastructure. In the immediate aftermath of the crisis, the Mexican government has expressed its willingness to provide technical support, and China is involved in large-scale projects for the installation of solar farms to add 1,000 MW of capacity by the end of 2025 and another 1,000 MW by 2031.

Hurricane Oscar

In addition to the failure of the electrical grid, the eastern extremity of the island was impacted by serious flooding resulting from hurricane Oscar, which entered the island as a category 1 storm.  The Cuban authorities have so far reported 7 fatalities from the storm, primarily as a result of flooding, as well as economic damages to infrastructure and the agricultural sector. Some areas remain unreachable so the full magnitude of damage has not yet been assessed. The hurricane did not have any impact on assets of the Company.

Power Outage

As reported in the international press, Cuba’s entire electrical grid collapsed on Friday 18 October 2024, twice again on Saturday and a fourth time on Sunday, as attempts were being made to reconnect the grid. The resulting nationwide blackout, now heading into its fourth day, has affected the entire population of the island and all businesses, as well as many other public services such as the supply of water and access to telecommunication services.

According to our on-the-ground managers in Havana, the Cuban authorities have confirmed that the process of reestablishing the electrical system continues to be extremely complex.

The present crisis is a result of an unfortunate mix of factors, including fuel shortages, the recent passage of hurricane Milton, lack of maintenance and upgrade of existing power plants, deteriorating infrastructure, insufficient installed capacity, and rising national demand. The U.S. Cuban embargo complicates matters significantly, preventing the supply and transport of imported oil, equipment and spare parts, and triggering excessive price-hikes at a time that Cuba’s tourism sector continues to struggle to recover the number of tourist arrivals and related tourism income to pre-COVID levels. In any case, it is clear that significant effort and investment will be required over time to make the electrical grid more robust and reliable.

In the face of these difficult conditions, the Miramar Trade Center and the hotels in Havana, Varadero and Trinidad in which the Company has an interest are amongst the least affected and so far have all been able to maintain principal operations, with limitations, thanks to installed back-up generators and – in the case of the Meliá Trinidad Península Hotel – solar panels and battery packs that make this hotel nearly self-sufficient.

The ability of the properties to continue operating in this fashion will depend on the supply of fuel to continue running the on-site backup generators.

Hurricane Oscar

In addition to the failure of the electrical grid, it is likely that Cuba’s East coast will soon be impacted by hurricane Oscar, a category 1 hurricane that is expected to make landfall between Baracoa and Moa and will leave Cuba as a tropical storm in the North of the City of Holguín.

We sincerely hope that Cuba’s electricity company (Unión Eléctrica) will be able to rapidly restore Cuba’s electrical grid and that the impact of hurricane Oscar will be minimal.

On 13 May 2024, an extensive research note regarding CEIBA Investments Limited was published by SINGER Capital Markets (“SINGER”), the primary broker of the Company.  SINGER’s main conclusion regarding the Company is as follows:

“… CEIBA has demonstrated an ability to operate in a difficult environment and owns profitable assets that are attractively valued that, subject to currency restrictions, are capable of generating a decent investment return. In addition (and there is no sign of this occurring), should the US relax or remove its sanctions regime, or should Cuba be more successful in its ongoing reform efforts, we see room for considerable upside from the normalization of asset values. The removal of Cuba from the controversial US State Sponsors of Terrorism list alone would have a significant positive effect on tourism to Cuba.  That said, the short term outlook is difficult and reflected in the fund’s valuation.  At this level and acknowledging the risks, we see CEIBA as offering an attractive asymmetric return profile for a long term investor…”

The research note can be accessed on Research Tree (https://www.research-tree.com/), or by financial institutions and investment professionals by clicking on this link.  By clicking on the link, you confirm that you are a financial institution or investment professional.

Only days after Management learned that the Sol Palmeras Hotel in Varadero has been awarded the TripAdvisor “Best of the Best” Travelers Choice Award 2024, we received another great message: after only 4 months following its official opening in January 2024, our new Meliá Trinidad Península hotel has been awarded the TripAdvisor Travelers Choice Award 2024!

The Meliá Trinidad Península Hotel is a state-of-the-art, solar energy powered, 401-room international-category 5-star beach resort hotel located next to the UNESCO World Heritage town of Trinidad.

Again, we are very proud, pleased and grateful for all the hard work that the teams of our joint venture, our shareholders and our strategic partners have been and are putting in to make this hotel a success!

Management is extremely pleased to report that the Sol Palmeras hotel in Varadero, in which CEIBA Investments Limited holds an interest of 32.5%, has been awarded the TripAdvisor “Best of the Best” Travelers Choice Award 2024! The Sol Palmeras Hotel is a 607-room international-category 4-star beach resort hotel, including 200 bungalows, located in Varadero next to Cuba’s only 18-hole golf course.

We are very grateful for all the hard work and dedication put in by the staff and the manager, Meliá Hotels International, towards achieving a stellar product during challenging times. From our side, we will continue to support all our hotels in Cuba as we contribute to presenting Cuba as one of the world’s premier tourist destinations.