6 months ago
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Bondholders in Specialty Coffee Investments Company Limited, an outfit connected to businessman and investor Michael Lee-Chin, voted to extend the maturity of a bond by three months, but more negotiations could follow.
The initial extension is days away from expiration.
“The bondholders voted in favour of an extension to April 30, and interest will be paid,” said Andrea Kelly, general manager of the Jamaica Central Securities Depository (JCSD).
The JCSD said that based on documented information “the issuer requested the extension” and it was approved after “consultation with the arranger”.
The reason for the extension was not stated in the document.
Mark McIntosh, an executive director for Specialty Coffee Investments, did not immediately respond to requests for comment.
The bond was issued in 2021 to refinance or replace earlier debt. At the time, Specialty wanted to refinance up to $1.9 billion, comprising a local currency bond of up to $500 million at 9.75 per cent, and a second tranche up to US$8.7 million at 7.25 per cent per annum.
The original bonds issued in 2016 raised $1.8 billion at 9.5 per cent interest and was used to to finance the acquisition of Mavis Bank Coffee Factory for $1.3 billion as well as working capital needs. Specialty Coffee Investments Company acquired Mavis Bank in 2016 from joint-venture partners Jamaica Producers Group and Pan-Jamaican Investment Trust. Mavis Bank, one of the largest producers of Jamaica Blue Mountain coffee, has been in operation for over 90 years and has longstanding trading relationships with Asia, Europe and North America. Its green beans carry the factory’s name, while its roasted beans are branded as Jablum.
A notice that a bondholder said he received via email last indicated the possibility of a further extension of the maturity of the 2021 bonds beyond the initial April 30 date.
“A further 18 months extension is being sought from the investors at an increased interest rate of 12 per cent,” the email stated, while asking the recipient to indicate whether they would accept or decline the offer.
The bondholder said the correspondence was sent by bond arranger VM Wealth Management Limited, however, VM Wealth is yet to respond to a request for comment other than acknowledging receipt of the questions.
The correspondence to the bondholder said a “clear position cannot be expressed” were the offer to be rejected.
Asked about the veracity of the 18-month extension, Kelly of the JCSD said only that bondholders have agreed to April 30.
When a bond matures bondholders receive outstanding interest along with the principal amount initially invested.
“I wanted to principal to use to buy a house,” said the bondholder who expressed concern that he might miss the opportunity to close the purchase of property were there to be a further delay.
English (US) ·