WITH the original sale of its 72.1411 stake in Ciboney Group Limited falling through at the end of June, 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 — has intensified efforts to find an investor to acquire its interest in the non-operational listed company.

Ciboney Group was formerly a major investor in the Ciboney Hotels and Villas in Ocho Rios, St Ann. Due to the financial meltdown of the 1990s and its heavy debt burden to different financial institutions, its properties were sold off by Finsac which was the majority shareholder in the distressed financial companies. One such property has since been renamed Sandals Ocho Rios with the company selling its piece of land in Culloden, Westmoreland, in December 2017 for net proceeds of $226.27 million. Ciboney paid a $185.64 million capita distribution to its shareholders from the sale.

Finsac has tried over the years to dispose of its interest in Ciboney with its latest efforts starting in November 2021 to market the opportunity for a buyer to acquire the firm and become listed on the Jamaica Stock Exchange (JSE). However, after receiving the relevant government approvals, the preferred bidder had withdrawn from the offer.

Ciboney released its annual report on Monday which revealed that it had a net loss of $4.62 million which is an improvement over the $5.26 million loss for the prior financial year (FY). As at the end of its FY on May 31, 2022, Ciboney had $3.7 million in assets and $10.4 million in liabilities which resulted in a shareholder net deficit of $6.7 million. It had $1.03 million in cash and cash equivalents and $700,000 in payables. This payable is related to its auditor KPMG whose work was accounted for as an expense.

As a result, whenever Ciboney does pay KPMG, it would have $331,151 in cash remaining. The company is required to hold an annual general meeting (AGM) by October 16 after getting approval from the relevant minister. Ciboney last held its AGM in March 2021 with the current AGM expected to incur additional expenses. Ciboney had a volume weighted average price of $0.61 on Thursday which gives it a market capitalisation of $333.06 million. As a company listed on the JSE, Ciboney must pay an annual listing fee every January 1. Main Market companies with a market cap between $250 – $500 million must pay a listing fee of $211,264.20. If the market cap increases to $500 million and above or $0.92 per share, the annual listing fee amount would be $352,107.00. Thus, Finsac will have to find a buyer in short order before the company possibly runs out of cash and becomes unable to pay the annual listing fee.

“This position has been communicated to Finsac Limited which controls the majority shareholding through various companies and we understand that efforts have intensified to identify an investor to acquire these shares and we will provide further updates on these developments in due course. The directors will continue to keep shareholders and prospective investors informed with news to timely disclosures of any new developments,” said the report signed by Chairman Errol Campbell and Director Geoffrey Messado. Tricia Grant-Mitchell and Michael Campbell are the other directors with Sharon Burke serving as company secretary.