Sagicor appoints trustee amid default on bond payments by iCreate
The next 48 hours will be a crucial period for training institute iCreate Limited, following the appointment of a trustee by Sagicor Investments to force the company to make good on a $24-million bond it executed in 2020.
The bond, which was issued on February 7, is structured for semi-annual payments at 12.5 per cent and is set to mature in 2025.
But the fate of the cash-strapped iCreate Limited now hangs in the balance, after the institution breached the repayment terms of the debt facility, triggering the appointment of licensed insolvency practitioner and head of business recovery services, Kenneth Tomlinson, on Monday.
iCreate’s stock has since plummeted to $0.70 per share, down from $0.81 on Monday.
“I can’t speak much on the matter, except to say that the connected parties will have a series of meetings over the next 24 to 48 hours,” Tomlinson told the Jamaica Observer.
The value of the default is unclear, but CEO and founder Tyrone Wilson will have to convince the bondholders that he can pay up or face the consequences, which include forced liquidation of the business.
The news of receivership comes amid actions to increase revenue flow to the company which accumulated losses of $150 million over the nine-month period ending September 2023. Revenues of the iCreate, however, swelled to $78.5 million, largely due to improved revenues in the third quarter from the recently acquired digital outdoor advertising entity, Visual Vibe.
Visual Vibe Limited was acquired for a total consideration of $588.6 million seven months ago, but already, newly reappointed head of the company, Wilson, wants to sell a portion of the business.
Earlier this month, iCreate entered into an agreement with what has only been described as a ‘strategic investment group’ led by Anthony Dunn, for the sale of 30 per cent interest in subsidiary Visual Vibe.com Limited. The board was scheduled to meet yesterday to consider the spin-off of iCreate’s shares in Visual Vibe.com Limited.
Overall, iCreate is worth $325 million.
As at September 30, Sagicor Investments was listed as the eighth largest shareholder in iCreate. The company is majority-owned by Kintyre Holdings Limited — a company in which Wilson is also chairman and CEO.