DBJ clarifies its role in Outameni
The Development Bank of Jamaica (DBJ) has sought to clarify its dealings with the Outameni Experience in Trelawny when it invested US$500,000 (J$56 million) in equity.
The bank’s chairman, Joseph Matalon, says the DBJ was forced to set the record straight as certain comments in the media may be misinterpreted by the public.
According to Matalon, in January 2005, Orange Valley Holdings, which operated Outameni, approached the National Investment Bank of Jamaica (NIBJ) for an equity investment of US$500,000 to assist with the construction of the attraction.
He says in accordance with the mandate of the NIBJ to provide equity capital to viable projects, and in keeping with its focus on the development of tourism-related projects, on March 31, 2005, the NIBJ, approved an investment of US$500,000 in Participating Preference Shares.
A year later, the NIBJ merged with the DBJ.
Matalon says in 2012, the potential purchase of Outameni by the National Housing Trust (NHT) was discussed at a meeting of the DBJ.
He says based on a request from the NHT, the DBJ Board resolved to offer its letter of no objection, should the NHT decide to proceed with a purchase of the property.
According to Matalon, in October 2013, the Board of the DBJ took the further decision to write off the investment in Orange Valley Holdings altogether, because some $209 million the company owed to lenders continued to accrue interest, further increasing the outstanding balances.
Matalon says in any future liquidation of the Company, the DBJ’s Preference shares would rank behind secured lenders.
The DBJ Chairman says given these facts, it was clear to the Board that the chance of any recovery of the investment was extremely remote and therefore justified the write-off of the asset.
However, he says the Preference Shares have not been cancelled, and so the DBJ can collect it in the event there is a turnaround in the fortunes of Orange Valley Holdings.
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