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Connected party pledges 43m NCB shares as loan collateral

Published:Sunday | December 30, 2012 | 12:00 AM

Close to J$1 billion worth of National Commercial Bank Jamaica Limited (NCBJ) shares owned by a connected party were collateralised for a loan, according to market filings on the Jamaica Stock Exchange (JSE).

The transaction hints that the connected party is preparing to fund a new project or investment.

The identity of the connected party remains undisclosed and messages sent to NCBJ Chairman Michael Lee-Chin via his Portland Holding group went unanswered up to press time since last week. Lee-Chin owns approximately 60 per cent of NCB, or some 1.44 billion ordinary shares directly or via connected entities.

The JSE has advised that on December 20, some 43 million NCBJ shares were transferred from a connected party as collateral under a loan agreement.

Outside of Lee-Chin's companies, only two other shareholders hold shares above the transacted amount: LOJ PIF Equity Fund with 110.79 million shares and Harprop Limited with 110.52 million shares at last disclosure.

NCBJ shares closed up at J$25.40 on Friday, but traded at J$22.10 on the day of the transaction. At that price, the 43 million units would be valued above J$950 million.

NCBJ, among Jamaica's largest and most profitable banking and financial services companies, made J$10 billion net profit for its year ending September 2012 or 27 per cent lower year on year.