PULSE Investments Limited is banking on the redevelopment of its Villa Ronai property in Stony Hill to repay a $975.62-million bond that has fallen into technical default, as auditors warn that the company’s ability to remain a going concern depends on successfully restructuring the debt and executing the project.

The proposed $815-million redevelopment would transform the nine-acre property into a 75-suite boutique resort- style estate, with proceeds from the sale of 55 suites earmarked to settle the bond when it matures in June 2027. However, the plan remains subject to bondholder approval, while development financing and contractual arrangements have yet to be finalised.

Details of the proposal were outlined in Pulse’s audited financial statements for the year ended June 30, 2026, published on Monday, November 2, two months after the original filing deadline.

The company’s auditors, PricewaterhouseCoopers, flagged a material uncertainty over its ability to continue operating after Pulse recorded a $349.23-million net loss and ended the financial year with current liabilities exceeding current assets by $1.02 billion.

“The company does not expect to repay the bond from its operating cash flows and is restructuring the bond so that it will be settled from the proceeds of the sale of the redeveloped units at Villa Ronai,” the audited notes stated.

The repayment challenge follows several setbacks to Pulse’s original residential development at Villa Ronai, which it acquired in 2021 with plans to construct a 30-unit community. The company broke ground in August 2022 and initially targeted completion in 2024, but the development was not completed as planned.

During the latest financial year, agreements for the sale of three units were cancelled, with deposits held in escrow refunded to the purchasers’ attorneys in July 2026. The company has since abandoned the original residential development concept in favour of a project incorporating hospitality and wellness facilities.

Pulse issued the secured bond in June 2022 under a $1.1-billion facility arranged by Barita Investments Limited, with proceeds used primarily to repay an existing loan from National Commercial Bank Jamaica Limited and finance infrastructure works at Villa Ronai.

The company had drawn down $826.70 million by June 2025, but subsequently struggled to meet its repayment obligations. In March 2025, JCSD Trustee Services Limited, acting as trustee, reported that Pulse had defaulted on scheduled principal and interest payments.

Barita Investments, the sole bondholder, granted a payment holiday in January 2026, suspending principal and interest payments until June 30. As part of that arrangement, $148.92 million in interest outstanding as at January 6 was added to the principal, increasing the amount owed to $975.62 million.

The payment holiday has since expired without a formal extension, although the bondholder and trustee have allowed Pulse additional time while considering a restructuring proposal submitted on September 11.

“The payment holiday ended on 30 June 2026 and, while the bondholder reviews the restructuring proposal, a further extension has not yet been granted. The terms of the payment holiday have therefore not been met and, to that extent only, the bond is in technical default,” the financial statements explained. Pulse’s directors expect to conclude negotiations before the bond matures on June 29, 2027, but the restructuring had not been approved when the accounts were authorised for publication on October 29.

The debt is secured by a first legal mortgage over Villa Ronai, which was independently valued at $4.90 billion in June 2023 and carried on Pulse’s books at $5.40 billion at the end of the latest financial year.

The property’s reported value substantially exceeds the outstanding bond, but the company’s immediate difficulty lies in converting that asset into sufficient cash to meet its debt obligations.

Under the revised development plan, Villa Ronai’s 62 existing accommodation units will be reconfigured into 55 premium one-bedroom suites, while a new three-storey building will accommodate another 20 signature suites.

The estate will also feature a restaurant, swimming pool, deck areas and landscaped wellness amenities. Pulse intends to sell the 55 converted suites, using the proceeds to repay the bond.

The estimated $815-million development cost covers construction, refurbishment, professional fees, selling expenses and financing costs. It excludes another $693.57 million already spent on the property, including infrastructure works, building approvals, site preparation and capitalised interest.

Financing is expected to come from a combination of development loans, purchaser deposits and equity, with Pulse disclosing that an indicative term sheet has been received for a secured loan of up to $550 million.

“An indicative term sheet has been received for a secured development loan of up to $550 million to Villa Ronai Investments Limited, subject to conditions customary for a facility of this kind, including pre-sales, building approvals and valuations,” the audited financials stated.

The construction outline was issued for quantity surveying in September, and a bill of quantities has been prepared. However, the development agreement with the proposed partner was still being finalised at the time of the financial statements.

The redevelopment will be undertaken through Villa Ronai Investments Limited (VRIL), a special purpose company incorporated in May 2026 in which Pulse holds a 40 per cent stake. The remaining 60 per cent is held by Pulse Chair Hilary Phillips and Managing Director Safia Cooper, who own 40 per cent and 20 per cent, respectively.

The proposed restructuring comes as Pulse attempts to stabilise its wider operations following a difficult financial year in which it swung from a $357.65million net profit in 2025 to a $349.23million loss.

The reversal was driven largely by a $633.76-million impairment charge against its advertising entitlements, alongside the absence of the $410.36million fair value gain on investment properties that had supported the previous year’s earnings. Pulse’s advertising entitlements, representing advertising space owed to the company by media houses in exchange for television programmes and other content, were reduced in value to $1.59 billion. The company held 56,933 30 second advertising spots across eight media houses in the Caribbean and New York at the end of June. However, the entitlements have not been utilised in recent years, prompting management to reassess their recoverable value.

Pulse said negotiations are under way with an advertising agency representing a prospective purchaser interested in acquiring spots across several markets.

“We have not given up on the value of these entitlements. Negotiations are under way with an advertising agency acting for a client that has expressed strong interest in buying spots across the media houses in most of the territories where we hold them. Any sale achieved above the reduced carrying amount will flow directly back to stockholders,” Phillips said in the company’s annual report.

Management expects to realise proceeds from the advertising entitlements during the 2027 financial year, providing another potential source of liquidity as the company works to restore its financial position.

Meanwhile, Pulse’s traditional entertainment and modelling activities continue to contribute relatively little to its revenue.

Rental income from Villa Ronai and its Trafalgar Road properties amounted to $140.20 million, accounting for approximately 95 per cent of the company’s $148.05million turnover. Some $58.54 million of that rental income was charged to the estate of deceased co-founder Kingsley Cooper for spaces occupied by connected parties, with the amount settled against balances owed to related company G.L. Superb Limited rather than received in cash.

Model agency income stood at $3.83 million, compared with $66.53 million in 2024, reflecting the diminished contribution of a business that was once central to Pulse’s operations.

The company’s total assets declined four per cent to $11.62 billion, comprising largely investment properties and advertising entitlements. Its cash balance stood at $28.31 million, against total liabilities of $2.32 billion.

Despite the liquidity pressures, management maintains that the company’s substantial property holdings provide sufficient asset backing for its obligations, with directors expressing confidence that the bond restructuring can be completed.

Phillips has identified 2027 as a critical year for the company, with priorities including concluding the restructuring, launching the Villa Ronai redevelopment, monetising advertising entitlements and maintaining tighter control over operating costs.

Under the revised development plan, Villa Ronai’s 62 existing accommodation units will be reconfigured into 55 premium one-bedroom suites, while a new three-storey building will accommodate another 20 signature suites.