Lee-Chin-linked firms pay US$94m after deadline; bondholders rule out enforcement
WEEKS after missing a year-end deadline that put a Supreme Court lawsuit on the table, Michael Lee-Chin’s companies have paid a US$94- million bond instalment, with bondholder leaders insisting that enforcement is now off the table.
The payment, which had been due on December 31 under a court-backed resolution agreed with noteholders, was received on January 23 and has since begun flowing to investors, according to the trustee, JCSD Trustee Services Limited.
“The money that was due on the 31st of December, it was paid on Friday (January 23), and we have started paying the investors from Friday,” Andrea Kelly, general manager of JCSD and JCSD Trustee Services, told the Jamaica Observer in an interview conducted on Tuesday.
Distribution of the funds has been staggered because of transaction limits on the National Commercial Bank platform, Kelly said, noting that payments to roughly 2,000 individual and institutional investors were being completed this week.
“We are using the NCB platform, and they were having some issues with their platform because, based on the number of persons, there is a transaction limit,” she said. “So it was done this morning (Tuesday), and we are completing them today (Tuesday). Everybody should receive their funds by the end of today.”
The US$94 million payment — comprising about US$75 million in principal and roughly US$19 million in interest — followed weeks of uncertainty after Lee-Chin’s AIC Barbados-related issuers missed the December 31 deadline set out in a resolution approved by a supermajority of bondholders late last year.
The bonds were issued by AIC (Barbados) Limited, Portland Barbados Limited and Specialty Coffee Investment Company Limited under 14 separate trust deeds overseen by JCSD Trustee Services Limited. Under a conditional forbearance resolution — an agreement under which bondholders temporarily agreed not to take legal action as long as specific payments were made — the issuers were required to pay US$19.1 million in outstanding interest and US$75 million toward principal by year-end, with the principal payment representing roughly one quarter of the approximately US$297 million still outstanding.
As previously reported by the Observer, bondholders had issued an ultimatum in November requiring full payment by year-end, warning that failure to comply would trigger enforcement action, including a possible Supreme Court lawsuit and acceleration of the debt. The resolution also allowed for the enforcement of collateral, including shares in NCB Financial Group pledged as security. In effect, a default could have put Lee-Chin’s NCB Financial Group shareholding at risk.
When the deadline passed without payment, JCSD confirmed that no funds had been received by December 31, raising the prospect of court action and intensifying pressure on Lee-Chin and his companies.
Bondholder leaders now argue that the late payment satisfies the first and most critical condition of the resolution and effectively removes the threat of enforcement.
“The trustee advised the committee that the payment was received on Friday and the funds cleared in full on Friday,” said Christopher Zacca, chairman of the bondholders’ negotiating committee. “The borrower has satisfied the first condition of the resolution that was passed by a supermajority, so there can be no enforcement,” he told the Business Observer.
Zacca acknowledged that the payment was made after the stated deadline, but said the resolution allowed for a 45-day period that preserved the agreement.
“There was a little bit of a debate because it was a little late, but it was within a 45-day period,” he said. “It’s unfair to leave doubt in your reader’s mind that he could face enforcement. There’s absolutely no chance he can face enforcement.”
Kelly, however, declined to comment on whether the late payment extinguishes enforcement or acceleration rights under the resolution, saying the trustee was focused on executing its payment obligations to investors.
Asked directly about enforcement, she said only that the payment obligation had now been met and distributions were under way, and did not elaborate further on the legal implications of the delay.
Beyond the December payment, Kelly said investors are now looking ahead to the next scheduled obligations under the restructuring framework.
Kelly said the next scheduled payment falls due in September 2026. Some interest was paid in December, with further interest expected once NCB Financial Group declares its next dividend, which is typically paid around March.
Because those dividends are being used to fund the bond interest, the trustee cannot yet say how much will be paid, she explained. Any interest still outstanding must be fully settled by the end of September 2026.
In a press release issued on December 30, a day before the missed deadline, Lee-Chin had said he was undertaking a “structured and time-bound review” of repayment options in line with the agreement reached with bondholders. The statement referenced a 45-day period commencing December 31 to address the US$94 million then due and said Lee-Chin was evaluating options including full repayment, settlement within the agreed period, or the sale of his shareholding in NCB Financial Group.
“This process is focused on identifying a responsible solution that best serves all stakeholders,” Lee-Chin said in the release, adding that he remained “fully committed to meeting these obligations in an orderly and transparent manner.”
The eventual payment, though late, appears to have eased immediate tensions between the issuers and the bondholder committee. Zacca said the focus has now shifted to ensuring future obligations are met on schedule.
“On behalf of the committee, we are pleased that Mr Lee-Chin’s businesses, the issuers, have met the first condition, which was to pay the US$94 million,” he said. “We look forward to them continuing to meet their obligations under the resolution,” he concluded.
Michael Lee-Chin. Bondholder leaders say a delayed US$94-million payment by companies linked to the billionaire has removed the need for enforcement action.