DOLPHIN Cove Limited’s shares tumbled on Jamaica Stock Exchange (JSE) on Tuesday, wiping out $361 million (US$2.3 million) in market value after reports emerged that its parent company, Controladora Dolphin S.A. de C.V (Dolphin Discovery), had filed for bankruptcy.

According to a report by El Heraldo de Mexico on February 12, Dolphin Discovery had applied for bankruptcy proceedings. A follow-up report on Monday by Dario Celis Estrada stated that the Dolphin Discovery Group owed US$200 million in liabilities to funds associated with Prudential Insurance, Cigna Insurance and, Life Insurance. Gerardo Badín has been appointed as the inspector/conciliador to oversee the bankruptcy proceedings, the report added.

The news comes as Dolphin Cove Limited faces challenges in the tourism sector, with Reportur.us, a leading tourist newspaper, citing a slowdown in tourists last summer that affected some of Dolphin Company’s parks. The news has also been reported by other outlets, including Disney Dining which published a report by Chloe James on the developments surrounding Dolphin Discovery.

Efforts to reach officials at Dolphin Cove Limited for comment on the bankruptcy filing of its parent company, Dolphin Discovery, were unsuccessful.

A receptionist at Dolphin Cove’s Ocho Rios location said the director had left for the day, while calls to CEO Gonzalo Pachéco Perez went unanswered.

Additionally, emails sent to Eduardo Albor Villanueva, co-founder and CEO of Dolphin Discovery Group, and Sergio Jácome Palma, chief financial officer (CFO), also received no response.

Stafford C Burrowes, founder and former chairman of Dolphin Cove Limited, told the Jamaica Observer he had no information on reports of the bankruptcy filing of Dolphin Discovery, the parent company of Dolphin Cove.

Burrowes’ comments come as he is no longer associated with the company, having been terminated as a director of Dolphin Cove by World Of Dolphins Inc, a subsidiary of Dolphin Discovery Group, on December 2.

Burrowes still holds a collective 9.81 per cent stake in the company, largely through his holding company Garden House Holdings Limited which owns 9.55 per cent.

Additionally, Burrowes may hold a 2.5 per cent stake in Dolphin Capital Company, according to a 2015 takeover bid circular.

A new chairman has not been publicly announced, and the change in leadership has yet to be disclosed on JSE.

In a separate development, court documents showed that Miami-Dade County has filed an eviction case against MS Leisure Company Inc, which operates The Miami Seaquarium in Key Biscayne, Florida. Eduardo Albor, referred to as the president of The Dolphin Company and MS Leisure Company, was named in the filing.

MS Leisure Company Inc, operator of Miami Seaquarium, and Miami-Dade County have been in mediation since October 2024, after a judge denied the county’s motion to evict the company, according to
NBC Miami.

Court filings revealed that MS Leisure deposited $84,590.83 with the court on February 13.

In a related development, regulatory filings showed that World of Dolphins Inc, a subsidiary of Dolphin Discovery, owns 79.99 per cent of Dolphin Cove Limited’s ordinary shares, acquired between December 2015 and January 2016.

Dolphin Cove’s 2023 audited financials also revealed that World of Dolphins pledged its Dolphin Cove shares as collateral for a note purchase agreement on behalf of Dolphin Discovery in April 2019.

Dolphin Capital Company, S. de R.L. de C.V., is the ultimate parent company of Dolphin Discovery, serving as the intermediate holding company for all operating companies including Dolphin Cove.

As investors await further news on Dolphin Cove’s parent company, Dolphin Discovery, it is worth noting that a bankruptcy proceeding does not necessarily mean the entity’s assets will be fully liquidated to repay creditors. Under Mexican law, where Dolphin Discovery is incorporated, a debt restructuring could allow creditors to be repaid over a longer period while enabling the operating businesses to continue.

The impact on Dolphin Cove’s Jamaican operations is unlikely to be immediate, unless creditors make changes or requests to the intermediate holding company.

Dolphin Cove Limited’s financials for the nine months ended September 2024 showed a decline in revenue and profit, amid its parent company’s bankruptcy proceedings.

World of Dolphins received $376.68 million (US$2.41 million) in dividends from Dolphin Cove during 2024 and owed Dolphin Cove US$942,743 at the end of September. Dolphin Cove paid US$342,045 in management fees to its parent company in 2023 while earning US$34,379 in interest from World of Dolphin and US$185,236 in revenue from Dolphin Discovery.

Dolphin Cove’s third quarter saw it earning 19 per cent less in revenue, to the tune of US$3.18 million, as a result of the disruptions from Hurricane Beryl and reduced airport arrivals from the Sangster International Airport in the period. The operating profit dipped three-fifths to US$512,287, with consolidated net profit declining 78 per cent from US$952,962 to US$206,780.

For the nine-month period, Dolphin Cove’s consolidated revenue decreased 10 per cent to US$11.95 million, with operating profit dropping two thirds from US$4.72 million to US$3.17 million. Net profit dipped 37 per cent from US$3.68 million to US$2.33 million, with earnings per share moving from US$0.0094 to US$0.0059.

Dolphin Cove is likely to benefit in short order from the projected July 2025 reopening of the Ocho Rios cruise port in St Ann, Jamaica. Dolphin Cove had announced last year that it had plans to potentially sell a three-acre property in Providenciales, Turks and Caicos. It also announced its intention to sell a 22-acre property in Lucea, Hanover, to a hotel developer.

Dolphin Cove’s total assets were US$37.34 million at the end of September ,with cash and cash equivalents at US$1.53 million and its live assets (dolphins and other animals) valued at US$3.45 million. Total liabilities stood at US$6.11 million, with US$1.84 million related to payables and US$728,569 as bank overdrafts. Shareholders’ equity closed the period at US$31.23 million. Dolphin Cove’s debt to equity stands at 0.05 times while working capital is US$2.5 million — a 43 per cent year-over-year decline from US$4.4 million.

Dolphin Cove’s stock price dipped five per cent to close Tuesday at $18.67, which left it with a market capitalisation of $7.33 billion. The stock halted down during the day, when no trading took place for an hour before it reopened, and hit a new 52-week low of $15.50. The volume of 299,623 shares is the largest number of shares changing hands in over a year.

Dolphin Cove’s current board includes Eduardo Albor Villanueva, Valeria Albor Dominguez, Sergio Jacome, Renato Lenzi, John Bailey, Richard Downer and Noel Levy.

— Karena Bennett contributed to this story.