BONDHOLDERS have given businessman Michael Lee-Chin until the end of this year to make a US$94-million payment covering overdue interest and a partial loan repayment, or face the seizure of his Crown jewels — a massive 1.024-billion share stake in NCB Financial Group (NCBFG) that secures his companies’ debts.

The US$94 million is a decisive first hurdle, combining US$19.1 million in outstanding interest up to September 5 and a US$75-million instalment on the original principal. Investors in his companies — AIC (Barbados), Portland (Barbados) Limited, and Specialty Coffee Investment Company Limited — will vote in December on a deal that offers Lee-Chin more time. However, failure to make this initial payment by the December 31, 2025 deadline will automatically trigger the seizure of the NCB Financial Group shares.

This payment is the main condition of a formal truce known as a forbearance agreement. The deal was negotiated by a powerful committee led by Sagicor Group President and CEO Christopher Zacca. It gives the companies a final chance to repay the debt. Crucially, this new deal has an automatic trigger, meaning the process to seize the NCBFG shares used as loan security will begin immediately if the payment is missed — a key feature that was absent from previous proposals.

Furthermore, the agreement locks all 1.024 billion NCBFG shares in place as security. Zacca told bondholders that Lee-Chin has provided a signed letter instructing the trustee that no shares can be released until the entire debt is settled, preventing the collateral pool from being reduced during the repayment period.

The formation of this committee in the summer of this year marks a pivotal shift in the debt saga, moving from fragmented talks to a united front. Its creation was a direct response to noteholders overwhelmingly rejecting workout proposals from Lee-Chin himself across a series of meetings. To prevent the issuer from negotiating separately with 14 splintered creditor groups, a “who’s who” of Jamaican finance — including chief executives from Sagicor, JMMB, Barita, VM Investments, and GK Capital — united into a single bloc to represent all bondholders.

“The antecedents of this committee are that… a great majority of those votes rejected the issuer’s proposal,” Zacca, the committee chairman, told the meeting, framing the group’s tough stance. “In the past, the promises to pay have not been honoured. I don’t want to be kicking the can down the road.”

The “No Flexibility” Clause

The resolution’s most critical feature is its new automatic enforcement mechanism, designed specifically to eliminate the delays that characterised previous negotiations. “In the past, the promises to pay had no consequence if they were not made,” Zacca explained, emphasising why this strict trigger was essential.

If the US$94-million payment is not made in full by December 31, 2025 the trustee, JCSD Trustee Services, is formally instructed to “serve a notice of acceleration upon the company… declaring the sums owing… which shall include default interest” within 45 days.

“This does not give the trustee any flexibility or discretion,” Zacca stated emphatically to bondholders. “[After a total of] 45 days, if the money not paid, boom,” he said signalling the immediate and irreversible start of the enforcement process — the seizure of the 1.024 billion NCB Financial Group shares pledged as collateral for the debt.

This automatic trigger — a key achievement of the unified committee — applies to every subsequent payment in the schedule. “And that follows with every single other payment,” Zacca confirmed. Ultimate enforcement would mean taking control of the 1.024 billion NCBFG shares pledged as collateral, representing a 40 per cent stake in the financial giant.

The frustration of retail noteholders was palpable during the meeting. One investor, whose bonds matured in January 2024, endorsed the demand for immediate action should the issuer fail to pay by the deadline. “In the event of any default we go straight to enforcement… It is not open for an extension for another three years because some of us might not be around then.”

Averting a Market Crisis

The potential enforcement itself presents a complex challenge. Dumping the entire block of 1.024 billion NCBFG shares onto the open market at once could severely depress the share price, ultimately harming the very noteholders it is meant to repay and sending shockwaves through the Jamaica Stock Exchange.

Zacca acknowledged this, explaining that the 45-day window after a default is specifically designed to allow the committee to devise a sophisticated disposal strategy, rather than triggering a fire sale. “Enforcement, in my view, will not vary from all those shares being turned over to noteholders, but how they are disposed of,” he stated, adding, “It may not be in the best interest to immediately sell on the open market… and there are many other issues to contend with.”

He confirmed that one potential outcome is for noteholders to receive NCBFG shares directly in lieu of cash, though he cautioned that this would require navigating several legal steps.

When pressed on the fundamental question of whether Lee-Chin could realistically find the US$94 million by the deadline, Zacca revealed that the billionaire has personally, “assured us that he has the funds”. However, the committee’s stance was that their own confidence was secondary to the clear consequences now in place. The forbearance agreement stipulates further repayments. Critically, dividends from the pledged NCBFG shares will be used to pay the interest accrued up to June 2026, which is due by September 15, 2026, and the interest up to June 2027, due by September 15, 2027, before the full outstanding balance must be cleared by December 31, 2027.

The resolution now faces a critical test in 14 separate noteholder meetings scheduled for December 2-10. Passage requires a super-majority of 75 per cent for each individual note. Zacca urged all bondholders to ensure their vote is counted, stating, “It is imperative that all bondholders take the time to either sign the proxy or come out in person.”

To achieve this, the trustee and the major brokerages are proactively contacting their clients to mobilise the vote.

While the five leading brokerages (Sagicor, JMMB, Barita, VM, and GK Capital) are advocating for a ‘Yes’ vote, Zacca indicated they do not alone control the necessary super-majority. The Jamaica Observer understands that, collectively, they hold more than 50 per cent but less than 75 per cent of the debt, making the votes of smaller noteholders decisive for the outcome.

Bondholders can seize shares of NCB Financial Group Limited in the latest deal.

Lee-Chin…his companies must meet every condition set out by bondholders to retain control of Jamaica’s largest financial conglomerate. 

ZACCA…in the past, the promises to pay have not been honoured. I don’t want to be kicking the can down the road.