Avia Collinder, Business Writer
Wilfred Baghaloo, a director of PricewaterhouseCoopers Jamaica, says that proceeds from the assets sale is insufficient to cover both the debts of Jamaica Citrus Growers Limited and financing obligations incurred during the period of the receivership.
The JCGL was formerly owned by the Jamaica Citrus Growers Association of Jamaica (JCGA).
Baghaloo, who is the agent of JCGL receiver John Lee, said Development Bank of Jamaica (DBJ), which placed the citrus company in receivership, is likely to receive less on the dollar than the commercial banks which are holders of secured debt.
DBJ's allocations will also be secondary to payments of working capital financing, Baghaloo, who is travelling abroad, said on Friday.
"We had to operate the company for almost two years. I had to borrow working capital financing; that has to be settled," he said.
The size of the company's debt obligations is publicly available, he said, but checks with the Companies Office on Friday proved futile. JCGA technical director Dr Percy Miller said last Wednesday that DBJ was owed J$120 million and that JCGL's total debt to creditors amounted to J$300 million.
SM Jaleel of Trinidad, through its local subsidiary Jamaica Beverages Limited (JBL), struck a J$1 billion deal with the receiver to acquire and invest capital in JCGL's assets at Bog Walk in St Catherine. The company has refused to divulge the split between the asset acquisition price and the capital investment programme.
The deal sealed in January gives SM Jaleel/JBL ownership of a juice and milk manufacturing operation sited on a seven-acre complex, another seven properties, four cottages, the Dairy Farmers brand.
The company also cut a side deal with JCGA for the rights to the Juciful brand, initially for 10 years in exchange for two per cent of annual sales.
Baghaloo declined to state the sale price for JCGL assets, the total owed by the company and to name all the creditors.
"From the sales proceeds, I had to pay all of working capital financing, pay the workers, then government taxes due and outstanding, then I had to settle all professional fees and all the bank loans to secured creditors. The proceeds were not sufficient to settle past debts, so I have to negotiate with all parties concerned. What I can't settle is the creditors which existed before. The DBJ will have to decide how they will collect the balance," he told Sunday Business.
"I can only settle for the secured creditors who will receive less than what is owed. The DBJ will receive far less than this amount," he said.
Queries to DBJ were unanswered up to press time.
Not all JCGA assets have been sold in this current deal. Other properties include cold storage and warehouse facilities at Newport West in Kingston, spanning six lots; a 130-acre property at Springvale; and other property in Kingston Gardens, which originally housed the JCGA headquarters but is currently rented and occupied by the Police Civilian Oversight Authority.