Sagicor Real Estate X-Fund will be winding up its subsidiary Jamziv Mobay Jamaica Portfolio Limited later this year as it pursues other real estate projects.

This was revealed at X-Fund’s annual general meeting (AGM) on Wednesday which was held in St Lucia with a satellite location at the Jamaica Pegasus hotel. Jamziv disposed of its 14.87 per cent stake in Playa Hotels and Resorts NV in January 2021 for US$96 million or $13.60 billion.

Jamziv or Playa NewCo was formed in April 2018 as the special purpose vehicle to effect the scheme of arrangement where four properties, a management contract for Jewel Grande Montego Bay, 50 per cent of Hilton land and the Palm Beach were transferred to Playa in exchange for 20 million Playa shares and US$100 million in cash. The X-Fund Group owns 60.81 per cent while the remaining 39.19 per cent is owned by the Sagicor Sigma Real Estate Global Fund.

Following the disposal of the Playa shares, the X-Fund Group paid down $2.99 billion in debt and invested the rest in repurchase agreements, a $3.08 billion short-term deposit and a $5.78-billion promissory note.

“There is a promissory note between Sigma and Jamziv. In respect of the maturity date and classification, there are plans currently for us to proceed with the winding up of Jamziv and that is expected to be completed in 2022. Once that wind up is completed, that loan will be cancelled. Irrespective of the maturity date, we don’t expect that loan will exist beyond 2022, hence the classification,” a Sagicor representative said in response to the query surrounding a $7.63-billion promissory note listed as current in its audited financials.

The Sigma unit trust’s stake in Jamziv was valued at $4.65 billion as per the November 2021 Sagicor Sigma offering circular. X-Fund Group had a $8.95-billion controlling interest in Jamziv as of December 2021. The proceeds from the winding up of Jamziv would go to the respective shareholders including the Sigma Fund which saw most of its properties in 2021 above 85 per cent occupancy. Its net asset value is down one per cent to $2.14 year to date.

Chief executive officer (CEO) of X-Fund Brenda Lee Martin said, “At this stage, we’ll not be saying exactly what we’re investing in, but we’re looking at opportunities which will become known when the time is appropriate. We are seeking to reduce our earnings volatility by investing in properties that are already up and we can earn predictable cash flow.”

Meanwhile, Chairman Christopher Zacca didn’t provide any significantly new details, he did reveal that the company is currently evaluating two commercial opportunities in St Catherine. At the July 2021 AGM, Zacca explained that the company would be looking at a pipeline of other real estate opportunities that weren’t heavily concentrated in tourism which was the case of X-Fund before the novel coronavirus pandemic. He did say that they were looking at industrial opportunities in the space. This comes as Sygnus Real Estate Finance Limited is looking to do an industrial facility on a 55-acre property in Lakespen for US$6 to US$10 million in the first phase.

Zacca also revealed that he’d be demitting the role of chairman come July 28, which is the next scheduled board meeting. He explained, “One focus for 2022 will be creating a more independent governance structure for the X-Fund Group as part of the growth strategy for the company.”

Zacca will remain on the board while continuing his duties as president and CEO of Sagicor Group Jamaica Limited. Zacca was appointed chairman in July 2019 after Richard Byles left the role to become the governor of the Bank of Jamaica.

The meeting also saw the return of PricewaterhouseCoopers (PwC) East Caribbean as auditors for the company with Grant Thornton agreeing to not be reappointed. PwC St Lucia resigned as auditors for the company in February 2019 to avoid a conflict of interest due to the relationship of Playa having PwC USA as their auditors.

X-Fund returned to profitable ways in the first quarter as it generated a net profit of $181.61 million compared to the loss attributable to shareholders of $202.11 million in 2021. This was largely attributable to the rebound in business for Double Tree in Orlando which saw its revenue double to $1.72 billion (US$11.08 million). This was on the occupancy of 91.6 per cent and an average daily rate of $125.85. X-Fund had $7.1 billion in cash at the end of the quarter and total assets of $31.58 billion. Total liabilities and equity attributable to shareholders were $9.08 billion and $16.73 billion.

“The outlook for the group remains positive. We are seeing the return of international visitors compared to 2020 when there were more local visitors from the US market. We have seen resilience and expect continued strong performance in the real estate market in Jamaica. With the gradual recovery of international tourism, the performance of DoubleTree in Orlando remains strong for transient business, and we are now seeing significant improvements in demand for group/conference business,” Lee Martin closed.