Mar 2008 Financial News

AIC sells another 13 million NCB shares - Lee Chin sidesteps question on whether he would give up bank

Mar 07, 2008

Michael Lee Chin's company AIC, in the past two weeks, has liquidated another 13.6 million units of National Commercial Bank stock, in what market sources speculate is a likely hunt for cash to finance an acquisition.

AIC Barbados Limited, since last November, has given up 1.5 per cent of its holdings in Jamaica's number two bank, in exchange for an estimated $630 million of cash - Wednesday Business' estimate of the trades based on the average selling price of the stock.

On Tuesday, NCB closed down 50 cents at $22.50.

The activity on the stock last week prompted one investor to demand of Lee Chin at the bank's annual general meeting in St Andrew last week, whether, if he got the opportunity, he would sell NCB.

The billionaire, however, dismissed the question, saying he was at the meeting to deal with NCB's business, not AIC's.

The share transactions have almost been as frequent as the number of trades recorded by associated parties of NCB and Lee Chin, its chairman, whose combined holdings in the bank, notwithstanding current activity, remains above 70 per cent, with AIC Barbados now controlling 64.8 per cent.

Small trades

But those trades have been relatively small in size. For example, Lee Chin himself bought 26,000 units on Friday, one of his vice-presidents, Robert Almeida, bought 747 units last week, while his brother Robert Chen acquired just under 29,867 via related parties.

The exceptions were the purchases by board member and a top five shareholder Donovan Lewis, who last month acquired 3.5 million units under his company Ideal Portfolio.

Sources say that in the past when such transactions occur, AIC has either bought a new asset and is seeking equity for the payment, or is about to make a new purchase.

Lee Chin, a billionaire investor, since he bought NCB in 2002, has acquired a number of other businesses here, spanning insurance, media, tourism and medical services.

AIC, however, has refused to explain what its up to, even after shareholders asked the NCB chairman for explanations at the company's annual general meeting last Thursday.

On Tuesday, Wednesday Business was told, having sent queries to Almeida, that "it would be unusual for AIC to divulge the specific motivations of their various actions", via email from Jean Lowrie-Chin, comm-unications consultant to Portland Holdings, the vehicle that holds all of Lee Chin's assets.

Lowrie-Chin said AIC was un-prepared to speak on the matter outside of what it divulged to the stock exchange and in NCB's annual report.

Heavily traded stock

In the meantime, NCB remains one of the most heavily transacted stocks on the JSE. Its one year trades have ranged as high as $24.95, but has also fallen as low as $19.52.

Trades last week covered more than 25 million units valued at more than half a billion dollars - at least 12.3 million of which were sold by AIC.

In February, when the stock hit a high of $24, it was the third most active stock, with trades valued at $904 million - outclassed only by Lascelles in the value of units changing ownership at more than $1 billion.


Source:
Jamaica Gleaner
Wednesday March 5, 2008

http://www.jamaica-gleaner.com/gleaner/20080305/business/business4.html