Caribbean Information and Credit Rating Services Limited (CariCRIS) has downgraded the credit rating of Poly Pet Company Limited which has yet to secure a refinancing plan with its bondholders.

In an update posted last Friday, CariCRIS downgraded bottle manufacturer from jmBB- to jmC and assigned a negative outlook. This stems over the company’s inability to secure a firm refinancing for its $1-billion bond issue which had an $800-million bullet payment on the December 23 maturity date. Poly Pet has secured 62.5 per cent approval from bondholders on the proposed refinancing plan, below the 75 per cent super majority required for it to take effect.

“Over the coming weeks CariCRIS will maintain close engagement with the company’s management to monitor the progress of ongoing negotiations with bondholders toward securing a definitive refinancing or repayment plan. Should a firm refinancing arrangement not be finalised by January 30, 2026, CariCRIS will lower Poly Pet’s rating,” the rating agency stated in its update.

CariCris downgraded Poly Pet’s credit rating jmB+ on October 1 over its inability to secure a refinancing plan by September 2025. Poly Pet originally issued the bond in December 2020 to refinance bank debt under more flexible terms and fund additional working capital requirements. However, the rating agency has downgraded the company every year except 2024 due to material deviations between its management accounts and audited financials along with challenging financial conditions.

Poly Pet is a private manufacturer that produces high-density polyethylene (HDPE) and polyethylene terephthalate (PET) bottles for various companies in Jamaica’s manufacturing sector. Nearly half of the company’s sales go to beverage manufacturers while condiment businesses represent 40 per cent followed by spices and chemical businesses. The company has a 60 per cent market share in Jamaica, with a small distribution operation located in Barbados. It’s owned equally between Anthony Brown and Shane Brown, who each hold a 40 per cent stake, while Tamara Phang holds the remaining 20 per cent stake.

CariCRIS’s latest report revealed that the company’s June 2023 revenue dipped two per cent to $1.40 billion but reported an operating profit of $182 million and EBITDA (Earnings before interest, tax, depreciation and amortisation) of $186 million. However, the company had a net loss of $32 million with operating cashflow of $128 million.

Poly Pet’s unaudited June 2024 numbers saw its revenue improve to $1.66 billion, with operating profit and EBITDA at $213 million. The net loss also narrowed to $1.70 million with operating cashflow up to $126 million. It had $1.62 billion in total assets which included $87 million in cash. However, financial debt was $1.23 billion with a tangible net worth of negative $318 million.

Poly Pet currently operates on a 24-hour/7-day basis, with the HDPE bottle-making machines at an estimated 85 per cent capacity while the PET bottle-making machines are at 65 per cent capacity. The company intends to grow its beverage segment through the introduction of proprietary plastic bottles for use by a regional conglomerate and begin producing buckets with covers. This will also be underpinned by its enterprise resource planning (ERP) system and move to acquire the Safe Quality Food (SQF) certification.