Fri | Nov 27, 2020

Ciboney finally strikes deal for Culloden land

Published:Friday | December 22, 2017 | 12:00 AMSteven Jackson
Errol Campbell, general manager of FINSAC Limited and chairman of Ciboney Group.

Ciboney Group, a darling listed company back in the 1990s that got caught up in the financial sector meltdown, has sold its prized property asset for US$2 million (J$250 million) after several years holding out for the right buyer.

But the price fetched by the land falls more than 40 per cent short of the losses accumulated by the resort company, which was approaching half-billion dollars.

Ciboney was formerly invested in hotel properties, which were sold off to repay debt, leaving as its single primary asset a piece of land measuring 6.56 hectares or 16.2 acres along the south coast at Culloden in Westmoreland. The beachfront property is located some two kilometres away from the Sandals Whitehouse resort.

The Finsac-controlled company, through subsidiary Number Sixty Limited, struck a deal with Green Forest Limited for the land on December 8, but the sale was disclosed on the stock market two weeks later, on December 22.

Ciboney has long held out for offers closer to the $200 million to $215 million valuation produced by Breakenridge & Associates in January 2015. But as it waited for the right offer, the lossmaking company's deficits have been climbing, and were last estimated at $424 million.

Chairman Errol Campbell also signalled two years ago that the company would have been willing to accept an offer of 20 cents per share for the company and the land together.

Ciboney's stock currently trades at 41 cents per share, placing the company's market value at $224 million. Two years ago, the stock was worth just six cents per share or $32 million.

The hotel company fell into the hands of the Government when financial institutions to which it was indebted were taken over by the state in the financial rescue programme executed through Finsac and associated agencies. Finsac controls at least 72 per cent of the company, based on recent disclosures of the top 10 owners, which would have priced its 20 cents per share trial balloon at around $78 million.

The land at Culloden was initially purchased for a hotel development and is still suited for that purpose, but can also be utilised for villas or a high-density residential development.