NWU president Vincent Morrison says he still hopes an investor will revive the old Highgate Foods factory after the sale of assets. - File

The salvageable assets of Highgate Foods, a 30-year-old company started by Claude Clarke, go on the auction block Thursday in a final attempt by receiver Ken Tomlinson to rescue value from the debt-ridden confectionery, Wednesday Business has learned.

Auctioneers DC Tavares-Finson will seek bids, starting at 11:00 a.m. at its New Kingston offices, for 4.12 acres of land as well as factory and office space covering 42,657 square feet, and other minor structures on the property located in Highgate, St Mary.

"Interested parties will be asked to start off the bidding," said a representative of the auction house.

The assets will be sold en bloc.

Millions in debt

The chocolate-making equipment will not be included in the sell-off, but sources say the old and dilapidated machinery was unlikely to fetch much.

Informed sources also say Highgate's debts are now estimated at about $300 million, of which approximately $200 million constitutes bad loans; between $63 million to $70 million of statutory taxes, including pension contributions; and, another $12-$15 million owed to creditors.

"Millions have not been paid over," said Wednesday Business sources.

The statutories are six years in arrears, a union representative confirmed last Wednesday.

Vincent Morrison, president of the National Workers' Union, also said workers who were laid off after Tomlinson took charge of the chocolate company are still owed notice and redundancy payments.

As for the pension contributions, Morrison said the matter was before the Financial Services Commission, but he was hoping for early resolution of the matter and other issues so that the factory's former employees could be paid monies due to them.

"The workers have been hurting," he said.

Tomlinson, who was appointed by bad-debt collectors Jamaica Redevelopment Foundation Inc. (JRF) in the latter half of 2006 to recover whatever value he could, whether through sale of assets or the company as a going concern, is considered unlikely to generate sufficient cash from the auction to make a meaningful dent in Highgate's liabilities.

Wednesday Business sources say the unpaid statutory deductions top $50 million and that the pension monies amount to another $15 million.

Tomlinson would not comment on the developments, but did confirm that the assets were about to be auctioned.

Pressed on Mussons Jamaica's claim to the Highgate trademark, he said there was nothing new to report.

Trademark

The trademark was among the most valued of the remaining assets of Highgate Foods. Mussons' claim came as a blow to JRF and Tomlinson, eroding their bargaining power with potential suitors for the flagging company.

Mussons, a former distributor of Highgate products under contract with Clarke, has already said it plans to start producing chocolate under the brand in time for the Easter season.

But Tomlinson said he would consider the matter closed only after he gets final words from the lawyers.

In the meantime, the union remains optimistic that whoever buys the Highgate assets will be inclined to put the factory back into operation.

"We're hoping the company will revive," said Morrison, noting that the job-starved Highgate community and its environs could ill afford to lose one of its biggest employers.

lavern.clarke@gleanerjm.com