US$40m payout expected on CL Spirits bonds
Published:Friday | September 30, 2011 | 12:00 AM
CL Financial group will be paying down a portion of the debt owed to holders of CL Spirits bonds by October but will still continue to owe more than US$300 million on the defaulted bonds.
Local and overseas bondholders will get a US$40 million (J$3.4 billion) payment from the troubled CL Financial group, according to a top-ranked source in the conglomerate.
It is the first real payment on the bond's principal which contributed to the downfall of the Trinidad based CL group.
"US$20 million of that amount is in escrow with the JCSD Trustee Services and the rest will be sent shortly," said the source, who requested anonymity. "So US$302 million will remain," the Lascelles official said.
The source was unable to state when or where the remaining funds would come from to settle the balance of the debt. Queries sent to Robin Levy, general manager of JCSD Trustee Services, went unanswered up to press time.
US$342 default
CL is in default on a US$240 million bond used to finance its acquisition of Lascelles deMercado and Company Limited. Another tranche was issued in Trinidad, bringing the total to US$342 million. The bond's interest payments were always met by the CL Financial Group, which was taken over by the Trinidad government in January 2009.
In early September, JCSD Trustee Services said it awaited notification on whether the sale of a Trinidad-based oil and gas subsidiary within the CL Financial Group last month would result in the payment of local bondholders.
Touchstone Exploration of Canada announced on July 11 that it would acquire Primera Group from CL Financial, through its wholly owned subsidiary Territorial Services. The deal was sealed mid-August for US$50.7 million, net of liabilities. The acquisitions include Primera East Brighton Limited, Primera Oil & Gas Limited, and Primera Oilfield Management Services Limited.
In July, Lascelles paid out a rare J$3-billion dividend, but avoided calling it a bailout for parent CL Financial. The dividend represented about 15.7 per cent of the J$19 billion held by Lascelles as retained earnings at March 2011. It was equivalent to 96 per cent of the spirits conglomerate's 2010 after-tax profit.
In August, Jamaican bondholders offered CL Financial an extended deadline, to September, to determine a payment schedule for the bond. That compromise was reached at a meeting in Kingston, in which 50 bondholders met with JCSD Trustee, head of CL Financial Alan Holder, and representatives of Black Sand Acquisition Inc, which has made an unsolicited bid for Lascelles.
The CL Sprits bond should have matured January 2010, but CL bought time following a series of negotiations with stakeholders.