Business News

T&T receives ‘first milk’ from Jamaican cash cow

Jun 16, 2009

Lascelles deMercado, one of Jamaica’s largest conglomerates, yesterday declared two dividends equalling J$14 (US$0.16) an ordinary share in a move that is significant because the group is now under the control of the Government of T&T. At a meeting on Friday, the Lascelles board approved an interim dividend of J$6.00 per ordinary stock unit and a special interim dividend of J$8.00 per ordinary stock unit, both payable to ordinary stockholders on record at the close of business June 26, 2009.

CL Financial acquired an 86.87 per cent stake in Lascelles deMercado last July, giving the financially-troubled local conglomerate control of the Jamaican company. On Friday, acting Minister of Finance Conrad Enill signed an agreement with CL Financial which gives the Government control over the group by virtue of the appointment of four directors to the seven-member board. Contacted in Jamaica yesterday, Lascelles deMercado company secretary and corporate attorney, Jane George, confirmed that the group had not paid a dividend since September 2007. She said the J$6 interim dividend could be seen as being an accumulated payment to shareholders who had not received any income for nearly two years.

The J$8 special interim dividend largely reflected the extraordinary dividend that Lascelles received from Carreras, Jamaica’s cigarette distributor. The Guardian understands that the timing of the dividend payment was linked to the fact that CL Financial needs to make an interest payment on the US$342 million bond it floated last year to pay for the Lascelles deMercado shares. In total, CL Financial raised external debt financing in the amount of US$450 million to finance the Lascelles acquisition, which amounted to US$676 million. CL Financial’s ownership of 86.87 per cent of the common stock of Lascelles means that 86.87 per cent of the dividend will be paid to the T&T company, The dividend payment, which converts to about US$13 million, covers the US$11.6 million interest owed to the bondholders on June 30.

The three main bondholders among them are holding 88 per cent of the CL Financial bond, the Guardian understands. The main bondholders are: the National Commercial Bank of Jamaica, which holds CL Financial bonds worth US$102 million, the Unit Trust Corporation (UTC), which holds bonds worth US$100 million, and the National Insurance Board (NIB), which also holds US$100 million. Lascelles is considered to be one of Jamaica’s blue chip companies, producing its main rum exports—Appleton and Wray&Nephew—as well as being a major player in general insurance, car distribution and as a land and property holder.

http://guardian.co.tt/business/business/2009/06/16/tt-receives-first-milk-jamaican-cash-cow

 



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