Lascelles to dole out J$3b to shareholders
Published:Friday | July 15, 2011 | 12:00 AM
Steven Jackson, Business Reporter
Lascelles deMercado and Company says a scheduled J$3-billion dividend payment will not hurt its liquidity but notwithstanding the timing avoided calling it a bailout for parent CL Financial currently in default on its Spirits bond.
Lascelles has announced a special dividend of J$25.70 per share, in addition to interim dividend of J$5.50 per share, both payable on July 27 to shareholders on record at July 21.
"The company carefully examined its cash needs and determined that there was cash which could be returned to stockholders; hence, the declaration of the dividend," said new group managing director Fraser Thornton in an emailed response to Financial Gleaner queries.
"No. Capitalisation and/or liquidity will not be affected."
The dividend would represent about 15.7 per cent of the J$19 billion held by Lascelles as retained earnings at March 2011. It is equivalent to 96 per cent of the spirits conglomerate's 2010 after-tax profit.
"There are 96 million ordinary stock units in issue. Therefore, the total dividend is J$2,995 million," said Thornton. The group's 2011 dividends are already twice the J$1.58 billion paid out in 2010.
Asked whether CL Financial would utilise the payment to bondholders in CL Spirit, Thornton said: "You would have to address this question to CL Financial. All stockholders deal with their dividends as they see fit".
CL Financial ultimately owns 87 per cent of Lascelles.
Queries to the Trinidad-based CL conglomerate went unanswered up to press time. CL, which holds 87 per cent Lascelles stock, mainly via CL Spirit, will earn about J$2.5 billion from the dividends or about 12 per cent of the total value of the bond in default.
CL Financial instructed Jamaican creditors last Wednesday that it would devise a payment plan by month end for its US$240 million of notes in "default" since 2009, according to Robin Levy, general manager of trustee, Jamaica Central Securities Depository (JCSD).
JCSD Trustee Services, a subsidiary of the Jamaica Stock Exchange, is the trustee for the noteholders and the banks that have lent money to CL in this deal.
The CL Sprits bond should have matured January 2010, but CL bought time following a series of negotiations with stakeholders, according to Levy. The amount still owed to bondholders was not ascertained.
CL Spirits was the vehicle chiefly used by CL Financial to acquire Jamaican spirits conglomerate, Lascelles deMercado, as well as raise debt to help finance the US$9.25 per share deal that closed in July 2008.
CL Financial's Jamaican-owned assets include Lascelles, as well as a 38 per cent stake or 554 million shares in Jamaica Money Market Brokers held by subsidiaries CLICO and CLICO Investment Bank.