Aug 2011 Financial News

Black Sand plays nice, gives CL one-month reprieve

Aug 17, 2011

Local bondholders have given CL Financial Group another month to determine a payment schedule for a US$240-million bond in default, according to JCSD Trustee Services Limited (JCSDTS).

It followed a meeting last week in which 50 bondholders met with head of CL Financial, Alan Holder, representatives from rival group Black Sand Acquisition Inc and the JSCDTS.

"The noteholders decided to extend the forbearance of enforcement until (September)," said JSCD general manager, Robin Levy. "They will not take any action against CL. The extension is for another month at which time CL should present exactly how they are going to pay out."

JCSDTS was incorporated in 2008 as a subsidiary of the Jamaica Central Securities Depository, which is itself a subsidiary of the Jamaica Stock Exchange.

Levy previously explained that while the bond's principal has been in default its interest payments have always been met by the CL Group, which was taken over by the Trinidad government in January 2009. 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 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.

Levy said Tuesday thatCL acknowledged continued challenges and that Black Sand representatives, including Jason Abrahams and Willam McConnell, gave shareholders an option.

"It was appreciated; and the noteholders have deliberated and have given CL another month," Levy said.

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 disclosed.


Source:
Steven Jackson, Business Reporter
steven.jackson@gleanerjm.com
Jamaica Gleaner
Wednesday August 17, 2011

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