No deal yet: Negotiations for cocoa assets ongoing, one year later
The Development Bank of Jamaica (DBJ) says it still in negotiations with the preferred bidder on the final sale terms for the all the commercial assets of the Cocoa Industry Board.
Michael Lee-Chin's Wallenford Limited was selected as the preferred bidder a year ago, in early September 2014.
Cabinet will have to approve the deal eventually reached with Wallenford Limited.
"Once same is received, the transaction will move to the executing of the agreements and possession of the assets by the preferred bidder. Transaction closing out activities will follow," the DBJ said.
The assets of the board 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.
The Lee Chin bid was one of three submitted at the May 12, 2014 deadline.
The Government, under the restructuring programme for its commodity boards, is exiting commercial operations in various agricultural markets.
This is the second commodity-related deal that DBJ is pursuing with a Lee Chin owned operation, a programme that aligns with a new policy stance for the government to exit the marketing and operational control of commodity assets to focus instead on oversight.
Negotiations with Portland Holdings Inc, the parent company of Lee-Chin's AIC International Investments Limited (AIIL), which in 2012 also bid for the assets of Wallenford Coffee Company, were similarly protracted.
DBJ said the cause of the delay was the restructuring of the coffee company's debt. Government agreed to assume the debt under the US$39.5 million deal with AIC International.
The Cocoa Board does not appear to be similarly encumbered. At last disclosure for year ending 2013, the state agency was projecting an accumulated surplus of $32 million. However, the company had working capital challenges, with current liabilities that doubled its current assets for each of the last three years.