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Ciboney directors want firm sold

Published:Sunday | February 28, 2010 | 12:00 AM

Directors of listed company Ciboney Group Limited say they are now awaiting legal advice on whether the firm can be separated as a legal entity from its sole asset - the 16-acre beachfront West-moreland property it has been trying to sell for two years now - to facilitate the possible sale of its trading name, which is believed to be attractive to investors because of its Jamaica Stock Exchange listing.

Ciboney Chairman Errol Campbell, the head of the Financial Sector Adjustment Company, the remnant of the 1990s government bailout vehicle for failed financial entities, told shareholders at an annual general meeting this week that a way should be found to make the company more attractive for sale.

"We have had some persons who were expressing interest in acquiring Ciboney Group and we are looking at the options that are available to see how best it could be accommodated," said Campbell.

Meanwhile, Robert Stephens, another company director, urged shareholders at Tuesday's AGM at the Knutsford Court Hotel in New Kingston to capitalise on the value of the firm's listed status.

Value of a public company

"The value of having a public company listed on the stock exchange is a significant (one) and we are, therefore, trying to find a buyer who will buy the company as a going concern and pay for the value of the listed-company status," Stephens said.

He pointed out that this was one of the main reasons the directors have not delisted the company. Ciboney Group's 546 million shares last traded at 10 cents per unit and had a market value of $49.14 million.

Stephens suggested that even the company's accumulated a loss could work in favour of a buyer that could gain from a write-off of that loss from future profits.

"What we would like to find is one of the shareholders, a group of shareholders, or other people outside of shareholders putting up the capital to buy not only the land but the company as a going concern, and that would give the maximum returns to the existing shareholders."

He pointed out that while it was best to sell the company, its losses and assets as a package, the firm could also be sold separately.

Meanwhile, Campbell told the
Financial Gleaner
that two Jamaican investors had shown interest in acquiring the company but they did not wish to purchase the land located at Culloden, near the Sandals Whitehouse resort, and said to be valued at $215 million.

Prospective buyers were not willing to pay anywhere near the market value for the property, Campbell noted, but the owners are holding out for the price, a move he said he supported.

"If the property is to be sold at all, it must never be fire sale," one shareholder declared.

Stephens remained optimistic about the prospects for the land.

"The reality is that we expect that the tourism market will pick up once the North American and Far Eastern economies begin to move again," he said.

"We anticipate that within the next year or so, the value of this land will be significant (and) somebody is going to come to the plate and say they want to develop it and will acquire the company and acquire the land. So we are anticipating much better returns on the land over the next year or two."

Ciboney profits

According to its last annual report, Ciboney Group has $62 million in current assets and $128 million in current liabilities with a net current liability of $66 million. It also made a profit of $4.8 million before tax and $1 million after tax. It was not clear what business activity returned income during the year.

The company was, at one time, the majority owner of the Sandals and Ciboney hotel properties located in Ocho Rios, St Ann. It was heavily indebted to a number of banks which were, in turn, acquired by FINSAC in the 1990s. The properties were later sold and the principal debts assumed by FINSAC were paid off. It was not ascertained who the current creditors are.