Ja­maica-born Michael Lee-Chin’s per­son­al in­vest­ment com­pa­nies are still deep in dis­cus­sions with bond­hold­ers, even as new dis­clo­sures re­veal that the icon­ic chair­man of the NCB Fi­nan­cial Group (NCBFG), the north Caribbean is­land’s largest fi­nan­cial in­sti­tu­tion, could lose con­trol of the com­pa­ny, that he ac­quired a ma­jor­i­ty stake of in 2002.

NCBFG, which is gear­ing up to raise US$300 mil­lion on the in­ter­na­tion­al cap­i­tal mar­kets this week, re­leased a pre­lim­i­nary of­fer­ing mem­o­ran­dum last week out­lin­ing the var­i­ous risk fac­tors tied to the up­com­ing trans­ac­tion. Chief among them: 50.5 per cent of NCBFG’s shares are cur­rent­ly pledged by Lee-Chin, the group’s founder, chair­man and con­trol­ling share­hold­er, for mon­ey that he raised from com­pa­nies he con­trols:

* Talks with bond­hold­ers have been on­go­ing since last year, with ac­tiv­i­ty ramp­ing up be­tween March and June for sev­er­al bonds. Spe­cial­ty Cof­fee In­vest­ments Com­pa­ny Ltd, one of Lee-Chin’s en­ti­ties, has been in dis­cus­sions over a J$1.9 bil­lion (US$11.84 mil­lion) bond, ac­cord­ing to the Ja­maica Glean­er. There have been no pub­lic up­dates in re­cent times, but bond­hold­ers have re­ject­ed some ex­ten­sion re­quests;

* AIC (Bar­ba­dos) Ltd, an­oth­er Lee-Chin af­fil­i­ate, held a bond­hold­ers meet­ing on April 23 to dis­cuss 12 in­stru­ments with a com­bined face val­ue of US$72.84 mil­lion. An AIC bond val­ued at J$1.5 bil­lion (US$9.35 mil­lion) se­cured a one-year ex­ten­sion last De­cem­ber;

* Sep­a­rate­ly, AIC (Bar­ba­dos) has been of­fload­ing shares on the Ja­maica Stock Ex­change over the last two years with 53,993,194 shares sold be­tween June 2023 to March 2025. That has raised over J$3 bil­lion (US$20.19 mil­lion). Be­tween Jan­u­ary and March, the com­pa­ny sold 10.31 mil­lion NCBFG shares, rais­ing J$509.63 mil­lion (US$3.18 mil­lion); and

* Mean­while, Port­land (Bar­ba­dos) Ltd al­so has sev­er­al bonds in play. A US$80 mil­lion bond came up for dis­cus­sion on March 13, fol­lowed by a US$7.5 mil­lion note on May 27. One of its bonds, val­ued at US$10.49 mil­lion, failed to get the re­quired votes for an ex­ten­sion through to Oc­to­ber 2027. More meet­ings are sched­uled for June 10 and 11 to ad­dress oth­er out­stand­ing oblig­a­tions.

Ac­cord­ing to the June 4 of­fer­ing mem­o­ran­dum:

“As of the date of this of­fer­ing mem­o­ran­dum, cer­tain of these bonds are delin­quent with re­spect to prin­ci­pal and in­ter­est pay­ments. A plan has been sub­mit­ted to the rel­e­vant bond­hold­ers for ap­proval, seek­ing a de­fer­ral and re­struc­tur­ing of the af­fect­ed pay­ment oblig­a­tions. Ap­proval of the plan by the bond­hold­ers re­mains pend­ing. Giv­en the delin­quen­cies, and con­sid­er­ing the pos­si­bil­i­ty of fu­ture de­faults, en­force­ment of the re­lat­ed se­cu­ri­ty in­ter­est could re­sult in our con­trol­ling share­hold­er and chair­man los­ing con­trol of the group with­out the con­sent of our oth­er share­hold­ers or note­hold­ers.

“In the event the en­force­ment of the pledge of the shares re­sults in an agree­ment for any per­son or group to ac­quire ben­e­fi­cial own­er­ship of 20 per cent or more of our out­stand­ing shares, such agree­ment would be sub­ject to Cen­tral Bank ap­proval. A new sub­stan­tial or con­trol­ling share­hold­er may al­so have dif­fer­ent strate­gic pri­or­i­ties or op­er­a­tional ap­proach­es that could ad­verse­ly af­fect our busi­ness, re­sults of op­er­a­tions, and fi­nan­cial con­di­tion,” the doc­u­ment stat­ed.

Port­land Bar­ba­dos had a US$23 mil­lion bond reg­is­tered in T&T which was set to ma­ture in April 2024. The bond, struc­tured with a fi­nal bul­let pay­ment, was not re­paid on its due date. Port­land sub­se­quent­ly en­tered in­to ne­go­ti­a­tions with in­vestors, and the out­stand­ing amount was cleared by Sep­tem­ber 2024. In­vestors ini­tial­ly ac­cessed US$4 mil­lion in cash col­lat­er­al, fol­lowed by three ad­di­tion­al pay­ments by Port­land to­talling US$16 mil­lion.

That bond car­ried an in­ter­est rate of 10.25 per cent, in­clu­sive of a 2.00 per cent de­fault pre­mi­um ap­plied due to the missed ma­tu­ri­ty. Re­pub­lic Bank Ltd served as trustee for the in­stru­ment, which was most­ly of­fered to T&T in­vestors.

NCBFG is list­ed on both the Ja­maica Stock Ex­change and the T&T Stock Ex­change. A NCBFG source told Sun­day Busi­ness Guardian that NCBFG has over 1,600 share­hold­ers on its T&T reg­is­ter. That does not mean they are all res­i­dents of T&T, or that there are not T&T res­i­dents who are on its reg­is­ter in Ja­maica. NCBFG has a to­tal of 47,698 share­hold­ers as at March 31.

A NCBFG div­i­dend of J$0.50 is to be paid to­mor­row, which will pro­vide share­hold­ers with a to­tal of J$1.29 bil­lion (US$8.05 mil­lion). AIC (Bar­ba­dos) is set to re­ceive J$597.53 mil­lion (US$3.72 mil­lion).

A com­pa­ny called NCB Glob­al Hold­ings Ltd, a sub­siary of NCBFG, owns 61.77 per cent West­moor­ings-head­quar­tered Guardian Hold­ings Ltd (GHL). A dis­clo­sure in GHL’s 2024 an­nu­al re­port in­di­cates, “Michael Lee Chin has a ma­jor­i­ty con­trol po­si­tion in NCB Glob­al Hold­ings Ltd which is the ben­e­fi­cial own­er of 61.77 per cent of the out­stand­ing shares in GHL.”

Ser­vices agree­ment

The in­for­ma­tion mem­o­ran­dum al­so dis­clos­es that the ser­vices agree­ment be­tween NCBFG and AIC Glob­al Hold­ings Inc is set to con­clude at the end of Ju­ly 2025. AIC Glob­al—a com­pa­ny owned by Lee-Chin—has been pro­vid­ing ad­min­is­tra­tive and oth­er sup­port func­tions to NCBFG and its sub­sidiaries un­der a con­tract with an an­nu­al base fee of US$4.8 mil­lion. The com­pa­ny re­ceived over US$10 mil­lion in 2024 and a fur­ther US$6.05 mil­lion be­tween Oc­to­ber 2024 and March 2025. All con­trac­tu­al pay­ments due up to the ter­mi­na­tion date have al­ready been set­tled.

“As of the date of this of­fer­ing mem­o­ran­dum, Mr. Lee-Chin re­mains the chair­man of the board, with the terms of his mod­i­fied en­gage­ment cur­rent­ly be­ing ne­go­ti­at­ed, and which are ex­pect­ed to be con­sis­tent with the terms of en­gage­ment ap­plic­a­ble to his role vis-à-vis those of oth­er non-ex­ec­u­tive di­rec­tors of the Board,” the dis­clo­sure not­ed.

Clar­ien Bank

The doc­u­ment al­so re­ferred to NCBFG’s agree­ment to sell 30.20 per cent of its stake in Bermu­da-based Clar­ien Group to Cor­ner­stone Fi­nan­cial Hold­ings Ltd. On May 8, 2025, the long-stop date of the sale and pur­chase agree­ment ex­pired, and the par­ties elect­ed not to ex­tend the agree­ment.

NCBFG ac­quired its orig­i­nal 50.10 per cent stake in Clar­ien in De­cem­ber 2017. The NCBFG ac­qui­si­tion co­in­cid­ed with Port­land Pri­vate Eq­ui­ty Ltd, which is con­trolled by Lee-Chin, ac­quir­ing a 17.92 per cent stake in Clar­ien, for US$10 mil­lion, ac­cord­ing to a June 14, 2024 ar­ti­cle in the Ja­maica Ob­serv­er.

Ac­cord­ing to the mem­o­ran­dum:

“Fol­low­ing the ex­pi­ra­tion of the sale and pur­chase agree­ment, in June 2025, NCBFG was ad­vised that a pre­vi­ous­ly agreed ex­it pro­vi­sion for a mi­nor­i­ty share­hold­er group in CGL (pri­vate eq­ui­ty funds in which Hon. Michael A. Lee-Chin, O.J. and Robert Almei­da, the chair­man and Group CEO of NCBFG, re­spec­tive­ly, each holds an in­ter­est) will be trig­gered by that mi­nor­i­ty share­hold­er group, pur­suant to which NCBFG will ac­quire an ad­di­tion­al 17.92 per cent stake in Clar­ien Grouo from the mi­nor­i­ty share­hold­er group at the fair mar­ket val­ue of CGL’s shares as will be de­ter­mined by an ex­pert or an­oth­er mu­tu­al­ly agreed method in ac­cor­dance with the ap­plic­a­ble share­hold­ers’ agree­ment.”

The of­fer­ing mem­o­ran­dum states that as of the date of the of­fer­ing mem­o­ran­dum, and based on the re­cent­ly ex­pired trans­ac­tion “we es­ti­mate the fair val­ue of the mi­nor­i­ty stake in Clar­ien Group will ac­quire to be ap­prox­i­mate­ly U.S.$20 mil­lion.”

(US$1 = J$160.46)