Nov 2011 Financial News

Montego Freeport to wind up operations after 45 years

Nov 02, 2011

Montego Freeport Limited (MFL) is finalising plans to sell off six property assets after which the company will be delisted and wound up.

The company, which was created 45 years ago to develop a portion of the Montego Bay waterfront, said it had completed its mandate.

The responsibility for selling the company's last four parcels of land has been assigned to parent company Urban Development Corporation (UDC), while inside sources say two other properties will otherwise be listed on the market.

The lands whose sale UDC would be finalising were identified as lots A26, A50B, M19 and H51.

Lot A50b and A26 are zoned residential/resort; and M19 and H51 are commercial/industrial, said MFL general manager, Tanique Brodber-Ventura.

The other two properties, Shop 34 at the Freeport Shopping Centre and Apartment G101 at Seawind on the Bay, are to be disposed of by next year.

MFL Chairman Johnny Gourzong was said to be unavailable for comment, but his statement to shareholders released with the annual report ahead of the annual general meeting, in August, suggested that hiring UDC as agent would allow Montego Freeport, which has little to no income, to contain its expenses while winding down operations.

Gourzong said the lots already had interested buyers.

At yearend March 2011, the company saw a steep decline in its financial position. It reported J$40 million of income but had J$51 million of expenses, and made a net loss of J$62 million due primarily, Gourzong said, "to a reassessment, based on present market conditions, of the book values for lots M19 and H51."

Last year, Montego Freeport's income topped J$94 million, from which it scored net profit of J$88 million.

Hiring the UDC as sale agent, Gourzong said, would "ensure the company does not exist with no revenue stream to solely monitor the performance clauses contained in the sales agreements".

The market value of the lands and other properties is unknown, but MFL's fixed assets were last estimated at J$1.1 billion on the company's balance sheet.

MFL is largely government-owned through the UDC and its subsidiary, National Hotels and Properties Limited, which together hold 81.95 per cent.

Top shareholders

The other top shareholders are Dr Irvin Hoo-Fat and Veronica Hoo-Fat, G.L. Enterprises Limited, MFG Trust & Finance Limited a/c 528, Peter Lee, Samuel Hart and Son Limited, Karl Wright, Manchester Pension Trust Fund Limited and Zerlene Taylor-Burbank and family.

Montego Freeport Limited was incorporated as a public company on February 15, 1966 to reclaim and develop up to 500 acres of land in a section of the Bogue area, now known as Montego Freeport.

The Government of Jamaica granted the company the right to dredge the marshlands, and the reclaimed property was developed, leased or sold according under a comprehensive plan that spawned the development of industrial, commercial, residential and tourism real estate.

More than four decades later, as Gourzong's statement to shareholders indicates, "Montego Freeport is now home to a booming industrial estate, the free zone, upscale residential complexes, luxurious resort offerings, a beach club, the Montego Bay Yacht Club and the parish's largest port. Montego Freeport Limited has just about achieved its incorporated objective."

All staff at MFL have been made redundant. Contract services for general manager, financial consultant and part-time accountant were retained.

The company has also advised the Jamaica Stock Exchange that it plans to apply for delisting.

"Full realisation of the company's mandate will only be achieved once the company ensures complete execution of all sales agreement stipulations; in essence, the company is bound to ensure that all the lots it sold are developed according to the respective approved usage," Gourzong said.


Source:
Avia Collinder, Business Writer
Jamaica Gleaner
Wednesday November 2, 2011

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