Sagicor tapped to buy Palmyra
Insurance conglomerate Sagicor Group Jamaica has been selected as the preferred buyer of the incomplete Palmyra condominium complex in Montego Bay, according to two independent sources.
It's not the first time the receiver for the property and his agents have tapped a buyer for Palmyra a property at the centre of a legal dispute between the developer, Robert Trotta, his bankers and the receiver who first placed the complex on the market four years ago but this time well-placed sources say the sale is expected to go through.
"Yes, it was acquired," said one senior source, who preferred to remain anonymous in order to respect internal protocol for such disclosures.
Sagicor was tapped as the preferred buyer over other overseas bidders, whose offers indicated the foreign companies were bargain hunting, said another source.
Trotta declined to comment on the transaction last night, saying there have been several reports of a sale over the years, but otherwise noted that he expects his lawsuit, filed in the Supreme Court two years ago and due for a hearing in four months, will resolve the rightful ownership of the property.
Sagicor is said to be buying Palmyra through various related entities, which would likely include Sagicor Real Estate X Fund or the Sigma Real Estate Portfolio both of which already hold hotel assets and is expected to pay "well over US$50 million" for the condo complex.
The deal is subject to close. It's understood that several caveats have been lodged against the property by individuals, which would need to be lifted ahead of the property transfer to Sagicor. The Real Estate Board (REB), which acts as protector of the depositors who made down payments on condo units, is responsible for ensuring that the caveats are discharged, once the receiver presents the REB with a stamped sale agreement for Palmyra.
FELL INTO ARREARS
National Commercial Bank Jamaica and RBC Jamaica took over Palmyra in July 2011 and placed it in receivership after Trotta's companies including Palmyra Resorts & Spa Limited and Palmyra Properties Limited allegedly fell into arrears on US$110 million of debt. Some US$22 million of the debt was financed by RBC while the other US$88 million is held by NCB and its investment arm, NCB Capital Markets Limited, as well as bondholders.
Kenneth Tomlinson of Business Recovery Services Limited was appointed receiver. Both Tomlinson and Sagicor Group President and CEO Richard Byles declined to comment on the sale. "I do not have anything to say on that. You know when I have things to say, I will say it," said Byles.
Donovan Perkins, CEO of Sagicor Bank Jamaica, with which RBC Jamaica was merged in 2014 after Sagicor Group acquired it, redirected requests for comment to Byles. The debts held by RBC were not acquired by Sagicor when it bought the bank.
At NCB Capital Markets, CEO Steven Gooden declined to comment, while calls to NCB Group Managing Director Patrick Hylton went unanswered.
Some of the US$110 million of debt is held by bondholders, who have to be briefed by the trustees on the sale. A source said that Sagicor is unlikely to officially disclose the acquisition of Palmyra before the meeting with bondholders is held. Sources say the meeting could happen as early as Thursday.
Sagicor is the latest prospective buyer in a line of failed deals for the incomplete Palmyra development since 2012, when the receiver tried and failed to auction the complex.
The most promising of those transactions included a US$120-million bid from a New York-based firm with Jamaican connections, Philangco Corp. Philangco proposed to buy the development for US$60m and spend another US$60m to finish the project but the company later withdrew in early 2014.
Palmyra is designed as a 288-room hotel/condominium complex encompassing three towers on 16 acres of seafront lands at Rose Hall.
At takeover by the banks, it had 103 owners of individual condos, with 97 units remaining for sale on the two completed blocks known as Sabal Tower and Silver Tower. The shell of a high-rise hotel designed for 88 studio suites, called Sentry Tower, and 11 three-bedroom villas were at varying stages of completion.
Trotta denies that his companies are indebted to the banks and has been fighting the takeover in court. He sued the banks in 2013 to recover the property, and is claiming losses of US$110 million. A trial date has now been set for September.
Sagicor plans to complete the Palmyra development, our source said. Subsidiaries of the conglomerate currently hold five hotel properties - four in Jamaica and one in Florida. One of the Jamaican properties, Hilton Rose Hall, is in proximity to Palmyra.