SAGICOR Bank Jamaica on Wednesday announced that it has placed into receivership the lands under mortgages for the Hambani Estates development granted to FirstRock Real Estate Investments Limited, describing it as a “difficult decision” but emphasising that the bank has a responsibility to its partners, clients, employees, and shareholders.

Sagicor explained that one house lot, which has been fully paid for, is exempted from the action which, it said, follows months of good-faith efforts to reach a fair and sustainable resolution.

“This outcome is the result of extensive dialogue and compromise. It comes only after exhausting all reasonable alternatives to achieving a mutually beneficial resolution. Our responsibility extends not just to our partners but also to our clients, employees, shareholders, and the broader community,” Sagicor said in a news release.

Located at 1-3 Bamboo Avenue in St Andrew, Hambani Estates is FirstRock’s first development project. The company broke ground in late 2021 and received a financing line of around US$10 million from Sagicor Bank to complete the luxury 12-townhouse project. It was originally scheduled to be completed sometime between April and June 2023.

However, since construction started in 2022, FirstRock has sold only one unit in the development and a new timeline for completion was set for early 2025. FirstRock Real Estate had to seek a one-year repayment extension from Sagicor Bank for its loan, which matured in mid-May last year.

Last December the Jamaica Observer reported that the delay in completing the project is presenting substantial risks to FirstRock Real Estate since the development, at the time, represented one-third of FirstRock Real Estate’s entire balance sheet.

Apart from the mortgage on the Bamboo Avenue property, Sagicor Bank has an unlimited corporate guarantee from the listed entity to satisfy the legal obligation of the loan.

Last November, FirstRock Real Estate suffered another blow when the National Environment and Planning Agency rejected its commercial development application at 5 Seaview Avenue. The company had knocked the building down on the property more than two years ago before its application was decided.

In its release on the development on Wednesday, Sagicor Bank said it remains committed to operating with prudence, transparency, fairness, and integrity.

“We will continue to act in the best interest of all our stakeholders,” the bank said.