SHAREHOLDERS of Sagicor Real Estate X Fund Limited (XFUND) could potentially see the first dividend paid in nearly a decade as the company’s board of directors is set to meet on proposed changes to eliminate its accumulated deficit.

XFUND’s board is set to meet on March 30 to consider approving a resolution which would reclassify part of its equity base and result in the company moving from an accumulated deficit to a surplus. While the group has $1.92 billion in retained earnings, it currently has an accumulated deficit of $3.21 billion at the stand-alone company level. The company can only declare and pay dividends out of a surplus according to St Lucian law.

“The company has further advised that at this meeting, the board will consider and, if deemed appropriate, approve a resolution to reduce XFUND’s surplus with the objective of eliminating the negative balance shown in retained earnings in XFUND’s stand-alone audited financial statements for the year ended December 31, 2025,” the notice stated.

XFUND is a St Lucian international business company that owns the DoubleTree by Hilton Hotel (DTO) in Orlando, Florida and The Strand Shopping Centre in West Bay, Grand Cayman, Cayman Islands. Apart from its real estate focused investments, XFUND also has an investment portfolio in bonds and units in the Sagicor Sigma Real Estate portfolio.

However, the company previously held 15 per cent of Playa Hotels and Resorts N.V. via a 60 per cent controlled subsidiary called Jamziv Mobay Jamaica Portfolio Limited. Jamziv was wound down in 2022 after it sold its remaining Playa shares in January 2021. That winding up exercise resulted in XFUND recording a $6.86-billion loss on its stand-alone accounts in 2022. This moved it from $4.42 billion in retained earnings to a $2.57-billion accumulated deficit.

Now, the company’s board of directors is considering a legal mechanism which would result in XFUND having a surplus/retained earnings again. Section 35 of St Lucia’s IBC Act allows a company to reduce its capital by effecting a transfer from share capital to a surplus line item. That surplus line item could then be transferred to the accumulated deficit, effectively restoring the company to positive retained earnings. However, this move does not change the total equity balance but carves out space for the company to legally satisfy the requirements of the IBC Act.

XFUND had $12.64 billion in share capital at the end of 2025. So, a reduction of $3.6 billion would result in the company having retained earnings of $392.43 million. That would enable the company’s board space to declare a dividend. XFUND last paid a $0.14 dividend totalling $314.02 million in August 2017.

A similar mechanism was executed last month by Trinidad and Tobago NGL Limited (TTNGL) at its March 5 annual general meeting. TTNGL had an estimated accumulated deficit of TT$1.8 billion at the end of December 2025, stemming from prior impairments made on its underlying asset Phoenix Park Gas Processors Limited.

The company’s board proposed a resolution to reduce the total share capital from TT$2.77 billion to TT$572.12 million. That TT$2.2 billion share capital reduction would allow the company to pass the solvency test described under Trinidad’s Companies Act. Shareholders approved the resolution, with at least 75 per cent of the votes cast being in favour of the resolution. This move has created room for the company to possibly resume the payment of dividends.

TTNGL had a net loss of TT$119.41 million in 2024 but had cash flow from operating activities of TT$37.63 million. For the nine months to September 2025, TTNGL had a net profit of TT$63.76 million, but TT$142.49 million in cash flow from operating activities. The difference between profit and cash generation stemmed from dividends paid by joint ventures and subsidiaries versus the share of profit on the income statement.

Hotel operations boosts bottom line

XFUND’s total revenue grew nine per cent to $8.48 billion with profit before tax rising 81 per cent to $1.36 billion. Consolidated net profit climbed 121 per cent from $456.70 million to $1 billion.

The improved earnings is attributable to the Florida hotel business which grew revenue four per cent to $7.64 billion due to higher occupancy levels and average daily rates. Despite the four per cent rise in operating expenses to $5.75 billion, lower depreciation charges and finance costs resulted in profit before taxation increasing 39 per cent to $997.62 million. Earnings before interest, tax, depreciation and amortisation increased five per cent to $1.89 billion.

The Strand Shopping Centre generated $136.21 million in rent and maintenance while netting $87.32 million after property expenses. XFUND also earned $660.66 million in interest income from its investment securities.

XFUND’s consolidated asset base declined seven per cent to $30.07 billion due to the repayment of $3.70 billion in maturing debt. XFUND’s cash resources stood at $4.71 billion with $22.34 billion in non-current assets. Total liabilities decreased 36 per cent to $6.47 billion with shareholder’s equity rising seven per cent to $23.60 billion. That translated to a book value of $10.52.

XFUND renewed its franchise agreement with Hilton Worldwide Holdings Inc. for another 15 years in September 2025. The company paid $882.71 million to Hilton in 2025 and is currently improving its Florida property to meet Hilton’s requirements.

XFUND’s stock closed Tuesday at $9.37, which leaves it up 17 per cent in 2026 with a market capitalisation of $21.03 billion. XFUND’s top 10 shareholders control 93.78 per cent of the company’s issued shares. These shareholders are largely pooled funds, pension funds and unit trusts, representing the long-term focus of these managed funds.