Jamaica Citrus Growers company to be wound up
Jamaica Citrus Growers Limited, JCG, is being wound up by newly appointed receiver Wilfred Baghaloo of PwC Jamaica, five years after the company's plant assets and some of its property were sold off to a beverage maker.
Baghaloo said he would first be disposing of six lots of land located in Newport Kingston that are owned by JCG, before winding up the company owned by the Jamaica Citrus Growers' Association, the JCGA.
But as to the valuation of those properties and how the proceeds from the sale would be assigned, the receiver/manager indicated that a fight was in progress.
"This is currently a legal matter and, as such, I cannot comment on same," Baghaloo told the Financial Gleaner.
He did not elaborate, but documents obtained by the Financial Gleaner indicate that Development Bank of Jamaica (DBJ) filed suit against JCGA Citrus Development Company Limited in late 2016 to recover unpaid debt on two loans valued at $130 million.
The parties are in dispute over what assets fall under the debenture held by DBJ, as well as the validity of the guarantee provided by the Jamaica Citrus Growers' Association through Citrus Development Company.
In February, Supreme Court Justice Kissock Laing ruled that Citrus Development's defence had no reasonable prospect of succeeding and awarded default judgment to DBJ.
The citrus company's lawyer, John Thompson, who is also chairman of the JCGA, says they are contesting Laing's ruling.
"We are in the process of appealing to the Court of Appeal regarding this judgment, which was a judgment by default," he said.
Thompson is hoping for a hearing date for the appeal by mid-August.
Meantime, DBJ's general manager for legal services, Sheron Henry, says the development bank plans to press ahead with the sale of the JCG properties at Newport West, once they are sure the citrus growers have exhausted their appeals.
"After we obtained the judgment, we had to apply for a charging order which was recently made final," said Henry in reference to the February ruling. "The initial charging order was a provisional one. We will now have to apply to the court for an order for the sale of the lots. We will do this once we are certain that the defendant has exhausted the appeal process," she said.
JCG first entered receivership in 2011, when the Development Bank of Jamaica hired John Lee to recover debts owed to the state-operated bank. Lee, who was then a partner at PwC Jamaica, has since retired from the firm. Under the first JCG receivership, its assets in Bog Walk, St Catherine, were sold in 2013 to SM Jaleel, the Trinidadian parent of Jamaica Beverages.
At the same time, the citrus growers licensed their Juciful brand to Jamaica Beverages Limited, on which they collect royalty.
Baghaloo, who was appointed receiver/manager in July, had no comment on the fate of the Juciful brand, which JCGA owns through a separate corporate vehicle. Jamaica Beverages is also going through its own challenges and Baghaloo has been appointed trustee by the Office of Insolvency to return it to financial health.
Association still functional
Meantime, technical director of the JCGA, Dr Percy Miller, says the association remains functional and is still serving its members.
"We run the biggest plant nursery in Jamaica," he commented on Wednesday.
Miller said he doubted the lots in Newport could be sold before the appeal was concluded. Both he and Thompson have indicated they are unhappy with the outcome of the first receivership and believe the assets were disposed of well below what they were worth.
Miller and Thompson have indicated that their primary concern is not the Juciful brand but the Newport West lots, which they describe as a primary source of income. The property is leased to a marine company, and the proceeds are used to finance extension services to farmers connected to the association. Seedlings from the nursery are either heavily subsidised or issued free.
Jamaica Citrus Growers' Limited was established in 1949 by the JCGA to provide an outlet for citrus farmers to sell their surplus fruit which is processed into frozen concentrate citrus juices. The association itself was formed in 1944. It represents around 7,000 citrus farmers.
JCG began to face liquidity problems from 2006, and turned to DBJ for a loan of $70 million in 2007 and another $60 million in 2009.
A Ministry of Agriculture manage-ment audit indicated that the Bog Walk factory was underutilised and had been operating at a capacity of less than 25 per cent for many years.