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Wallenford deal heads to closure following debt agreement

Published:Wednesday | April 1, 2015 | 5:09 PM

The sale of the Wallenford Coffee Company to AIC International Investments Limited appears headed for closure, pending the execution of documents signalling the Government's agreement to assume responsibility for the coffee operation's debt.

The restructuring of debt owed by Wallenford was the single factor delaying conclusion of the agreement, the Development Bank Jamaica (DBJ) said.

The coffee company's major creditors are the PetroCaribe Development Fund, EXIM Bank Jamaica and the European Economic Community, said the DBJ, which handled the sale on behalf of the Government.

The Ministry of Finance and Planning will absorb approximately J$2.54 billion, or US$26.77 million, in liabilities, the development bank said.

Wallenford was acquired by Michael Lee-Chin's Portland Holdings Inc, through AIC International, a transaction valued at US$39.5 million. AIC took possession of the asset in September 2013, but the transfer of Wallenford's debt has held up the closure of the deal for close to two years.

"Since the receipt of the parlia-mentary approval, the assumption agreement has been through a series of reviews and adjustments, led by the attorneys from the PetroCaribe Development Fund to whom the debt is owed, and the Attorney General's Chambers. The relevant agreements should be finalised for execution by the Honourable Minister of Finance shortly in order to finalise this matter," DBJ said.

Parliament approved Government's assumption of the debt on January 13, 2015.

"The assumption of these debts was not covered under the Public Debt Management Act (2012) as the debts were not previously guaranteed by the GOJ. Closing of the transaction is expected after the debt-assumption agreements have been executed," the agency said.

delay unlikely

DBJ has said that the pending divestment of cocoa assets is unlikely to encounter similar delays. Lee-Chin's Wallenford Limited is reported to be the preferred bidder for the commercial assets of the Cocoa Industry Board, which include fermentaries in Richmond, St Mary, and Morgan's Valley, Clarendon; the Montrose cocoa farm, also located in Richmond; processing equipment at Marcus Garvey Drive, Kingston; and 13.7 acres of land with building at Haughton Court in Lucea, Hanover.

"We do not at this time expect

parliamentary approval will be required to conclude the sale of the cocoa assets, however, Cabinet's approval of the final negotiated terms is required before any sale agreement can be executed," the DBJ said.