Ja­maican note­hold­ers have agreed to ac­cept an im­me­di­ate US$20 mil­lion pay­out from Trinidad-based CL Fi­nan­cial with a sec­ond tranche by year end, CL Fi­nan­cial Chair­man Ger­ald Yet­ming has dis­closed, re­vers­ing a de­ci­sion tak­en last week by lo­cal note­hold­ers to re­ject the of­fer. Cred­i­tors in Ja­maica and Trinidad are owed a US$342 mil­lion (J$29.4 bil­lion) debt as a re­sult of CL Fi­nan­cial's ac­qui­si­tion of Ja­maican spir­its con­glom­er­ate, Las­celles de­Mer­ca­do in 2008. "The Ja­maican note­hold­ers, in a meet­ing yes­ter­day (Mon­day) in Ja­maica, have agreed to a pay­out plan in­volv­ing an im­me­di­ate pay­ment of US$20 mil­lion in prin­ci­pal and a sec­ond tranche pay­out on or be­fore De­cem­ber 31, 2011," Yet­ming said in a no­tice to share­hold­ers on Wednes­day.

He said CL Fi­nan­cial was en­gaged with a team of pro­fes­sion­al ad­vis­ers and rel­e­vant cred­i­tors to de­vel­op a work­out plan that would lead to the liq­ui­da­tion of the debt. How­ev­er, Yet­ming ex­pressed frus­tra­tion that ri­val group Black Sand Ac­qui­si­tion, which is seek­ing to ac­quire ma­jor­i­ty shares in Las­celles, was de­lay­ing CL Fi­nan­cial's plans. "CL Fi­nan­cial and Las­celles had al­ready de­vel­oped the step-by-step plan to achieve these goals, but the hos­tile take-over bid for Las­celles...has pre­vent­ed the im­ple­men­ta­tion of the plan," he said. Yet­ming re­it­er­at­ed the Las­celles di­rec­tors' claim that the Black Sand takeover bid is fun­da­men­tal­ly flawed and in­ef­fec­tive in law and, hence, was be­ing chal­lenged in the Ja­maican courts.

"The work­out plan with cred­i­tors has been af­fect­ed neg­a­tive­ly by the hos­tile takeover bid, and un­til such time as the bid is held to be null and void or it is re­ject­ed by the board of Las­celles and its share­hold­ers, the work­out plan will be stalled," Yet­ming said. Last week, there were re­ports that Na­tion­al Com­mer­cial Bank Ja­maica (NCB), one of the largest of the bond­hold­ers, was be­ing pres­sured to side with oth­er CL Spir­its bond­hold­ers, who, in a closed-door meet­ing de­clared the debt in de­fault and sought to force CL Fi­nan­cial to put up Las­celles' stock for sale to the high­est bid­der. NCB had said that talks were con­tin­u­ing at dif­fer­ent lev­els. Black Sand, a group of in­vestors led by for­mer Las­celles man­ag­ing di­rec­tor William Mc­Connell, has bid for not less than 90 per cent of Las­celles' or­di­nary shares and 100 per cent of the two pref­er­ence stocks.

Las­celles di­rec­tors ar­gue that Black Sand's of­fer is non-com­pli­ant and lacks ev­i­dence of fund­ing. The Fi­nan­cial Ser­vices Com­mis­sion (FSC) ini­tial­ly agreed with Las­celles, but changed its po­si­tion fol­low­ing the re­vi­sion of Black Sand's of­fer. Las­celles, how­ev­er, has since main­tained its po­si­tion and has tak­en the FSC to court. "The mat­ter will con­tin­ue next week," Las­celles spokesman Knol­ly Moses said yes­ter­day. Lawyers for Las­celles' di­rec­tors be­gan ar­gu­ing their po­si­tion in the Supreme Court on Oc­to­ber 10, a move that could po­ten­tial­ly de­lay the Black Sand bid which is opened un­til Oc­to­ber 18. Las­celles wants the court to in­struct the FSC to deem the re­vised pro­pos­al non-com­pli­ant. This, in turn, would re­quire the is­suance of a third pro­pos­al and, con­se­quent­ly, de­lay the re­lease of the Las­celles di­rec­tors' of­fi­cial re­sponse to the of­fer.

Ja­maica Glean­er