FOSRICH Company Limited is seeking reprieve from its bondholders while it undertakes a reorganisation plan to cut costs, refinance debt and improve its revenue position which has slumped in recent times.

FosRich founder and Managing Director Cecil Foster set out the company’s financial difficulties and proposed recovery measures ahead of a September 29 meeting of bondholders. The lighting company currently has a $900 million bond which is scheduled to mature in February 2029, but interest payments on the facility have been delayed in recent times. The bond carries a 12.5 per cent interest rate and represents one-third of the group’s $2.72 billion in consolidated debt and 44 per cent of the company’s $2.04 billion in debt at the end of 2025.

“FosRich Company Limited acknowledges the continued delinquency in respect of the interest payment on the above facility and are taking necessary reorganizational steps to regularise the situation,” Foster said in a September 28 letter to JCSD Trustee Services Limited, the trustee for the bondholders.

The company incurred more than $444 million in net losses for the first six months of 2026, double the $189.56 million net loss reported for the comparative 2025 period. The higher losses came against the backdrop of revenue being slashed in half from $1.59 billion to $812.34 million.

FosRich attributed the fall in sales to the continued decline in global solar panel prices, which affects their business. The company has been pointing to falling solar panel prices since 2024 as a factor affecting its reported revenue figures despite improving volumes.

Managing Director Foster told the Jamaica Observer earlier this year that solar sales represented 35 per cent of total revenue, as Fosrich moved to put its solar business under Middlesex Solar Energy Limited, a subsidiary in which it holds a 75 per cent stake, on increased demand for the product from customers.

However, the economic reality for FosRich has become more difficult, according to Foster’s letter. The company’s working capital, defined as current assets minus current liabilities, has deteriorated over the last 12 to 18 months due to unexpected outcomes for certain projects. As a result, the company’s ability to pay its suppliers on time was impacted, ultimately pushing inventory intake off schedule.

“The high leverage and consequent debt servicing, especially in respect to principal payments, reduced the capacity of the company to replace inventory, resulting in monthly revenues moving from over $300m to under $150m. At an average gross margin of 42 per cent, the company is unable to pay both operational expenses and debt servicing,” Foster explained on the current situation.

FosRich’s current ratio was 1.39 at the end of 2023, meaning that the company’s current assets (such as cash and receivables) were 1.39 times more than its current liabilities. That ratio improved to 1.46 times in 2024 before it slipped to 1.07 times in 2025. A tighter current ratio means that a company’s resources are just enough to cover its immediate financial obligations as they arise.

FosRich’s turnaround plan

FosRich is now moving forward with a high-level reorganisation plan to correct its financial situation. It has made changes to its operational structure to cut administrative expenses by more than $160 million, including branch closures, contract terminations, salary adjustments and rationalising expenses.

The company has also engaged its financial partners of First Global Bank Limited (FGB), JN Bank Limited and VM Building Society (VMBS) to restructure or refinance debt at the various institutions. This is being supported by analytical analysis from professional services firm KPMG as FosRich looks to close the funding issue within the next three months.

“This institution is engaged in a 2-part structuring deal – first a sale and lease back arrangement of $1.7B of asset and thereafter a consolidation bond of up to $2.5B to pay out the company’s debts, provide approximately 4 months working capital and maintain only a single facility,” Foster noted on the initiative being worked on with VMBS.

A sale and lease back transaction involves the sale of real estate assets and leasing those assets afterwards for a fee. FosRich first mentioned a sale and lease back transaction in its first quarter (January to March) report and recognised a $543.31 million fair value gain on the revaluation of its real estate in the second quarter (April to June).

The consolidation bond is effectively the company paying all other lenders and paying one single lender on an ongoing basis. This bond would be used to pay out the $900 million bond and debt facilities held by JN and VMBS.

FosRich is also engaging with FGB to consider the restructuring of its loans for up to 15 years with an initial principal moratorium period covering the period required for the logistics to receive inventory from China, South America, USA and India. The bank is also looking at alternative private financing on behalf of FosRich to ease the debt burden for a stipulated period.

Meanwhile, JN Bank is eyeing the restructuring a small facility to provide FosRich with more manageable terms.

“It has been generally agreed by several analysts that the company’s ability to generate the levels of revenue required and to surpass the $350m level is eminently doable with the introduction of sufficient capital to regenerate this level of revenue,” the FosRich founder explained on the reorganisation plan.

While talks are ongoing with the financial institutions and other stakeholders, Fosrich is seeking forbearance for up to six months from bondholders.

Aside from the cost cutting measures implemented, FosRich is also strengthening the government framework. The company has sought to expand its independent non-executive directors to give independent control of the audit committee which would be chaired by an independent director with written terms of reference.

“The company is in dialogue to contract a dedicated commercial director, upon receiving funding, to engage with NaRRA (National Reconstruction and Resilience Authority) and other rebuilding efforts in western Jamaica as a significant pillar in the growth strategy of the company,” the letter explained.

FosRich owners seek $1 billion via share sale FosRich disclosed last November that its principal shareholders were seeking to sell up to 15 per cent of their shareholding to restore the liquidity position of the company. Chair Marion Foster and Cecil collectively control 79 per cent of FosRich’s ordinary shares or 4 billion ordinary shares.

Last year, the FosRich principals collectively sold 22 million ordinary shares to raise funds for project investments. FosRich Chief Financial Officer Peter Knibb also sold 11 million ordinary shares during that period. Another 26.62 million ordinary shares of FosRich were sold during the June 2026 quarter by Cecil Foster.

Since then, FosRich’s share price has declined 40 per cent in 2026 from $2.49 to $1.50 on Thursday. The stock closed at $1.04 on August 24, with an intraday and 52 week low of $1 on the same day.

“Further to these activities, the directors of the company are still engaged in seeking private participation equity placement of up to $1 billion in shares to reduce liabilities; however, the present depressed state of the shares of the company is resulting in unfavourable conditions. We anticipate this will improve significantly when the restructuring is completed,” the MD’s letter explained on the planned share sale.

Some of these shares are pledged for related party balances which represented $1.55 billion or 24 per cent of the groups’s $6.54 billion balance sheet at the end of 2025. L.C.C.M. Investment Ventures Limited, a registered real estate developer and a connected company to FosRich principals, owed FosRich $874.08 million with the loan balance maturing in December 2030.

BC Dundee Enterprise Limited owed FosRich $648.17 million at the end of 2025, with the loan balance maturing in December 2030. The FosRich principals collectively own 60 per cent of the company with Knibb owning 15 per cent according to documents at the Company Office records. BC Dundee is set to develop The Hamptons Trelawny real estate venture in the future.

Amid its efforts to ease its debt burden, Fosrich’s second quarter report shows that its stake in Middlesex Solar has increased to 75 per cent, from 20 per cent when the business was formed in october 2022. At formation, Marion and Cecil Foster each held 27.5 per cent, while Knibb held the remaining 25 per cent.

Fosrich also holds a 20 per cent stake in Blue Emerald Limited, which manufacturerds PVC pipes and repairs electrical transformers. However, recent checks show that the associated company is listed as removed from the Companies Office website.

FosRich’s next quarterly report is due by November 14, but shareholders will meet at the company’s annual general meeting on October 27 by its head office. During that meeting it is expected that the company’s board and management will provide investors with an update of the ongoing reorganisation plan and other initiatives.

CEO of Fosrich Cecil Foster (right) engages in a discussion with Minister of Industry, Investment and Commerce Aubyn Hill during the ground-breaking ceremony for Fosrich’s multi-storey supercentre at 76 Molynes Road in St Andrew. (Photo: JIS)