No Jamaica Stock Exchange guidance in Sweet River auction saga


No Jamaica Stock Exchange guidance in Sweet River auction saga

Company delisted with immediate effect

Observer Business Writer

Wednesday, February 12, 2020

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Having delisted Sweet River Abattoir & Supplies, the Jamaica Stock Exchange (JSE) says it is unable to offer the company any guidance regarding concerns over the auction of its assets on November 26 of last year.

Last month Sweet River's board of directors sought guidance from the JSE regarding the sale of its abattoir, advising that it would be late with its regulatory filings. Sweet River, based in Westmoreland, which is in the business of slaughtering and processing pigs, was on Monday (February 10) delisted from the Junior Market of the JSE with immediate effect.

The action was taken in accordance with Junior Market Rule 505 (14) (a) (i) and Sweet River's failure to remedy board-level and financial requirements breaches.

When contacted, JSE Managing Director Marlene Street-Forrest told Jamaica Observer's Business Report that the exchange is unable to offer any help to Sweet River directors over their grave concerns with the auction.

The directors raised concerns over the company's 12,000 square foot, state-of-the-art abattoir facility, which was auctioned to Restaurant Associates, franchisee of Burger King, Popeye's Jamaica, and Little Caesars.

Last September, Sweet River Abattoir announced it was selling its assets following years of operating at a loss and defaulting on loans and credit agreements with their bankers, creditors, and suppliers.

Street-Forrest explained that the JSE does not involve itself with the business operations of listed companies, save and except ensuring that they honour their JSE regulatory requirements. As such, the JSE managing director declared that the stock exchange is unable to involve itself with providing guidance to the directors of Sweet River regarding the way forward in resolving their concerns regarding the auction of the company's assets.

“Involving ourselves in the business operation of a listed company is outside of the JSE's remit,” Street-Forrest declared. She cited the auctioning of the company's assets as a business operation, which doesn't impinge on any regulatory concerns to trigger the JSE's intervention.

Sweet River Abattoir encountered problems that led to the erosion of its capital base, repeated losses, and an inability to service debt.

The company listed on the Junior Market of the Jamaica Stock Exchange six years ago, in 2014. It raised $180 million of equity capital in its initial public offer (IPO) that year.

The money was raised to assist the company in expanding its processing facility. Sweet River was previously owned and operated as a part of GraceKennedy & Company Limited. Many of its current shareholders are pig farmers.

The auction was conducted by CD Alexander Company Reality, with the assets auctioned comprising land spanning five acres and a two-storey building measuring 16,800 square feet. The ground floor holds a modern slaughterhouse, two offices and a welfare section, while the second floor contains several rooms and a storage area.

The auction also involved specialised equipment for slaughtering.

Sweet River Abattoir has faced challenges since its listing on the Junior Stock Market in 2014. It chalked up massive debt through its banker, First Global, to build a modern abattoir. The bank called in the loan last year after the company defaulted on several loan payments.

At last count in June last year, Sweet River Abattoir accumulated losses of $124 million with assets valued at $389 million, and equity at $19.6 million after factoring in liabilities.

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