Aug 2011 Financial News

CL to lay out new payment plan

Aug 10, 2011

CL Financial will on Thursday offer its latest payment plan to bondholders, including the Black Sand investment titans, regarding a US$240-million bond in default, according to Jamaica Central Securities Depository (JCSD).

The parties were expected to finalise payment last month following the initial 2009 default of the bond, used mainly to finance CL's 2008 acquisition of local conglomerate Lascelles deMercado & Company. Now Black Sand Acquisition Inc wants to acquire Lascelles in lieu of payment, amid other reasons outlined by the investors.

The bond was issued through subsidiary CL Spirits. Another tranche was issued in Trinidad, bringing the total to US$342 million.

"CL has been in discussions with Trinidadian noteholders and Jamaican banks and have made certain proposals for the payout of the Jamaican noteholders and we are awaiting final word on that. On Thursday we will meet with them to discuss their proposal," said JCSD general manager, Robin Levy.

JCSD, a subsidiary of the Jamaica Stock Exchange, is the trustee for the noteholders and the banks that have lent money to CL in this deal. Levy explained that the bond's principal has been in default but its interest payments have always been met by the CL group, which was taken over by the Trinidad government in January 2009.

The CL Sprits bond should have matured January 2010, but CL bought time following a series of negotiations with stakeholders, according to Levy. The amount still owed to bondholders was not ascertained. CL Spirits was the vehicle chiefly used by CL Financial to acquire Lascelles, as well as raise debt to help finance the US$9.25-per share deal that closed in July 2008.

CL Financial's Jamaican-owned assets include Lascelles and, up to last week, a 38 per cent stake, or 554 million shares, in Jamaica Money Market Brokers held by subsidiaries CLICO and CLICO Investment Bank.

Last month, Lascelles made a J$3-billion dividend payment to shareholders. CL, which holds 87 per cent Lascelles stock, mainly via CL Spirit, earned J$2.5 billion from the dividends, or about 12 per cent of the total value of the bond in default.

Black Sand, a newly formed St Lucia registered group of investors with William 'Billy' McConnell at the centre, has announced a US$3.86 (J$332) per share bid for Lascelles. Black Sand has financial backing from Octavian Special Master Fund, LP and Pan-Jamaican Investment Trust Limited, as well as other Caribbean investors. It also disclosed an alliance with Greystone Equity Partners Inc, which it refers to as its sponsor.

Lascelles, whose balance sheet assets top J$34 billion, is now managed by a Trinidad appointee, Fraser Thornton.


Source:
steven.jackson@gleanerjm.com
Steven Jackson, Business Reporter
Jamaica Gleaner
Wednesday August 10, 2011

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