MFL to handle own land sales - Gourzong
Published:Friday | November 11, 2011 | 12:00 AM
Montego Freeport Limited (MFL) says it will handle the sale of the four land parcels it still owns, and would continue to operate until the properties are sold.
Its parent, Urban Development Corporation (UDC), will monitor the sales agreements struck between Montego Freeport and eventual buyers of the properties, according to MFL chairman John Gourzong, in the event of a breach of performance targets and the MoBay company has to reacquire the undeveloped assets.
UDC will be responsible for selling the properties, as reported earlier.
MFL will delist from the stock exchange and wind up the company after the land assets have been sold. Resolutions were passed to that effect in August at the 45-year-old company's annual general meeting.
"Montego Freeport Limited sells land for development purposes only and has a performance clause incorporated in all sales agreements," said Gourzong in a November 2 letter to The Gleaner.
"This clauses gives MFL the right to repurchase land sold, at the original selling price, should development not occur within a prescribed period."
UDC will act as agent after the sale transactions so that MFL will not continue racking up expenses without an income stream to cover costs.
Shareholders also gave MFL the go-ahead to "negotiate and enter into an agreement with the UDC to assume the contingent liability contained in MFL sales agreements," said Gourzong.
"This agreement will facilitatethe company ending operations once its revenue stream has ceased, by appointing UDC as an agent to monitor and enforce, should it become necessary, the performance clause contained in the sales agreements," he said.
The chairman said the agreement covers all lots undeveloped at the time MFL is ready to wind up.
The value of the lands was not disclosed. MFL's investment properties had a carrying value of J$1.05 billion at March 2011. Its investment assets also include Apartment G101 at Seawind on the Bay and Shop 34 at Freeport Shopping Centre, which are also to be sold.