After nearly nine months hunting for a buyer to purchase its 72.1411 per cent stake in Ciboney Group Limited, Finsac (Financial Sector Adjustment Company) Limited — the entity set up by the Government in 1997 to address the liquidity and solvency crisis which existed in the financial sector in the early 1990s — is currently weighing its options after its preferred bidder withdrew its interest in acquiring the majority interest in Ciboney.

Finsac had put out an advertisement in The Gleaner in October asking interested bidders if they’d like to list on the Jamaica Stock Exchange (JSE) by purchasing the majority interest in Ciboney. Bids were to be sent in by November 8 to the Ministry of Finance or e-mailed to Errol Campbell.

Ciboney updated the market in a disclosure on June 1 that Finsac was in the process of finalising a decision with respect to the sale of the stake. It updated the market on June 27 that it had missed the statutory timeline under the Companies Act to have its next annual general meeting (AGM) by June 16. The relevant minister gave the company until October 16 to have its AGM, which Ciboney said would be enough time to have its 2022 audited financials (June 1 to May 31) ready for the meeting.

However, 10 minutes before trading officially began at 9:30 am on the JSE on Thursday, a disclosure was posted that the deal had fallen through. FINSAC said it had received relevant approvals as per government protocols for the preferred bidder. This sent many persons scrambling to sell their shares as the stock halted down to $0.77 on 1.3 million units at 9:31 and didn’t trade for an hour. Ciboney ended the day down 22 per cent to $0.76 with a market capitalisation of $415.85 million. It’s currently down 52 per cent since the week started after it traded up to $1.82 last Friday and down three per cent year to date.

“The directors understand further that the majority shareholder is reviewing its position and will communicate with us in due course how it proposes to move the matter forward in relation to the disposal of its shares, at which time, this information will be shared,” the Ciboney disclosure stated.

Ciboney had $1.33 million in cash at the end of February and has a net deficit of $6.34 million due to an accumulated deficit. While the company only had a cash outflow of $1.42 million over the nine months compared to the $4.91 million in the prior period, it is not generating any revenue to sustain its operations.

Ciboney previously held properties in the tourism sector and was formerly the major investor in Sandals Ocho Rios and Ciboney Hotels. It fell under the ownership of Finsac after its majority shareholders, Trumpton Limited, Crown Eagle Life Insurance Company Limited and Eagle Merchant Bank went under during the 1990s crisis in the financial sector. Many of its properties were disposed of with a piece of land in Culloden, Westmoreland, being sold of in December 2017 for net proceeds of $226.27 million. Ciboney paid a $185.64 million capita distribution to its shareholders from the sale.

SSL Venture Capital Limited (SSLVC) is the most recent company to undergo a takeover by a new majority shareholder after its business grounded to a halt, and Stocks and Securities Limited (SSL) was no longer providing funding for the company. MFS Acquisitions Limited acquired a 79.08 per cent stake in the company in May and changed the company’s name to MFS Capital Partners Limited with a focus on private equity. SSLVC remains up 213 per cent year to date at $2.94 with a market capitalisation of $1.18 billion. It traded as high as $4 last week Tuesday.