Fri | Dec 3, 2021

Finsac makes another try at selling Ciboney shares

Published:Wednesday | October 20, 2021 | 12:06 AM

The Financial Sector Adjustment Company Limited, or Finsac, is renewing efforts to offload its 72 per cent shareholding in Ciboney Group Limited.

Finsac – the government-created bailout agency used to take over distressed assets and rescue Jamaica’s financial sector during its mid-1990s crash and is now in the process of winding down – is giving prospective investors up to November 8 to make a bid. At the current market price of 66 cents per share, the Finsac holdings would be valued at nearly $260 million.

Finsac has been trying for some time to sell the shares, without success, after securing a buyer for landholdings in Westmoreland, the last piece of asset that was held by the resort company that it took over during the bailout of the Eagle financial group.

At the top of the year, amid rumours of a potential reverse takeover as the means by which the shares would be sold, the price of the CBNY stock vaulted to new records, from its normal trading range of 12 to 20 cents per share to as high as $2.30 – pushing Ciboney’s market value above $1.2 billion in the process, despite it being a shell company with no assets.

The stock price fell back to the 20 cents band, as precipitously as it rose, after Ciboney denied that a reverse takeover, whereby an investor acquires a listed entity for its own business purposes, was in the offing. The price has tripled since tripled from its mid-March floor of 22 cents to 66 cents currently.

Under its current solicitation for an interested buyer of its majority interest, amounting to 393 million shares, Finsac says the offer must be accompanied by the investor’s company profile and proposed business venture.

For the year ending May 2021, Ciboney reported accumulated losses of nearly $332 million and negative equity of $2.28 million. It reported further losses of $683,000 for the June-August first quarter.