Margaritaville to raise US$2m on bond market
Preps for post-COVID business resurgence
Hospitality company Margaritaville Caribbean Group, MCG, plans to raise up to US$2 million through a bond placement, for operational purposes. The company, whose franchises and subsidiaries are heavily dependent on travellers and tourism traffic,...
Hospitality company Margaritaville Caribbean Group, MCG, plans to raise up to US$2 million through a bond placement, for operational purposes.
The company, whose franchises and subsidiaries are heavily dependent on travellers and tourism traffic, has seen a severe fall-off in business under the pandemic.
“We are raising some additional working capital for MCG to get us through his period,” said CEO Ian Dear.
Mayberry Investments will act as the arranger of the bond but the details of the bond issue, including the coupon rate, were not immediately available.
Before the pandemic, MCG had planned to float a US$6-million bond, to benefit from falling interest rates and refinance expensive debt, but:
“We did not move forward with that raise,” said Dear.
Margaritaville Caribbean Group Limited operates a portfolio of restaurants, nightclubs and tours in Jamaica; Cayman Islands; St Thomas, Virgin Islands; and Turks & Caicos Islands or TCI. Its Margaritaville restaurant operation in Grand Turk, TCI, is listed on the Jamaica Stock Exchange. MCG is looking towards a revival of business as vaccine programmes roll out around the world, and the bond proceeds are expected to help the businesses prepare for the eventuality.
“We are encouraged – notwithstanding the current spike here – with the imminent supply of vaccines for Jamaica and our main tourism markets such as USA, UK and Canada being at an advanced stage of roll-out,” said Dear.
Margaritville Turks profit of some US$72,100 on revenue of US$5.94 million for the financial year ending May 2020. This represented nearly one-tenth of the profit from a year earlier at US$750,250 on revenue of US$7.6 million. The onset of the pandemic was blamed for the dip in revenue and profit. Margaritaville Turks Limited held US$5.3 million worth of assets with equity of US$4.3 million up to May 2020. The restaurant company carries no loans as liabilities, only trade payables.
The company in its annual report indicated that it sees the Caribbean as having geographic advantages that position it at the top of the list for travellers in a post-COVID-19 world. Margaritaville Turks earns nearly all of its income from cruise passengers, a sector that it expects to rebound in the second half of 2021.
“All major cruise companies are projecting to commence operations in the first half of calendar 2021 and Margaritaville (Turks) Limited is expecting to benefit from those coming into the Grand Turk port. This would provide Margaritaville with up to five months of earning opportunity for fiscal 2021,” the report stated. The information aligns with June cruise departure dates posted by major cruise lines, Carnival Cruises and Royal Caribbean.