The investment consortium, New Castle Company, which last year bought for $350 million in cash 90 per cent of Walkerswood Partners Limited – the holding company for local food processor Walkerswood Group – made $60 million in profit for its first eight months of operations.

In May 2009, the consortium, which includes Pan-Jamaican Investment Trust Limited and Associated Manufacturers Limited (AML), producer and local distributor of the Busha Browne and Jamaica Joe lines of

sauces, jams and jellies, undertook the investment after creditors agreed to massive court-approved, debt restructuring that would pave the way for a US$5-million rescue plan.

Walkerswood Group became insolvent after years of losses and racked up $375 million in current liabilities in excess of current assets.

“The spate of hurricane in the ensuing years substantially increased the cost of raw material to the group and in addition, new machinery that was purchased by Walkerswood Caribbean Foods for the purposes of improving production efficiency has failed to perform as expected,” said then CEO Woodrow Mitchell in a court affidavit. “Accordingly, in spite of strong demand for the Group’s products, trading results have continued to decline.”

The cash was therefore used for badly-needed working capital and the future development of the company.

The buyout deal called for creditors to take as low as 25 cents on the dollar owed to them along with special redeemable preference shares through a Creditors’ Trustee that will entitle them to receive 50 per cent of the consolidated annual net profits of the Walkerswood Group in excess of the first US$2 million for a period of 10 years. Those profit projections were based on strong demand for Walkerswood products in the US and the UK.

After the acquisition, AML’s business was merged with Walkerswood and is producing at both the AML facility in Kingston and at the Walkerswood facility in St Ann.

Pan Jam, which owns 25 per cent of New Castle, reported in its 2009 Annual Report that New Castle had assets totalling $461 million versus liabilities of $147 million, from which it derived revenues of $418 million.

For its part, Pan Jam also placed the carrying value of the investment at $193 million as at December 31, 2009.

“We are pleased with our investment’s performance to date and look forward to sharing with you the results of this exciting new venture in the future,” said Pan Jam of the acquisition.