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DBJ splits up Wallenford
Published: Friday | September 9, 2011
Milverton Reynolds, managing director of Development Bank of Jamaica.
*Coffee bids pushed back to October
Avia Collinder, Business Reporter
Published: Friday | September 9, 2011
Milverton Reynolds, managing director of Development Bank of Jamaica.
*Coffee bids pushed back to October
Avia Collinder, Business Reporter
The bid deadline for Wallenford Coffee Company has been pushed back six weeks allowing more time for investors to take an interest in the loss-making coffee processor.
Milverton Reynolds, managing director of the Development Bank of Jamaica (DBJ), blamed the delay on the complexity of the deal as well as late expressions of interest.
PricewaterhouseCoopers Jamaica (PwC), the advisory firm commissioned to sell the state asset, said in late August that it had got zero bids.
The bid deadline of September 2 has been pushed back to October 14.
"Advised of the interest of others, we took the decision to extend the date," Reynolds said Tuesday, stating that while no bids had been submitted to PwC because the interested parties had, by then, been advised of the extension.
The bid deadline of September 2 has been pushed back to October 14.
"Advised of the interest of others, we took the decision to extend the date," Reynolds said Tuesday, stating that while no bids had been submitted to PwC because the interested parties had, by then, been advised of the extension.
Wallenford, he said, has been divided into 10 discrete packages on which bids are being invited.
Prospective investors may bid on any single, any combination, or all of the packages as identified in the information memorandum issued on June 8. Bids for the complete Wallenford operation will still be accepted.
Wallenford grows, purchases and processes cherry coffee into green beans. It is Jamaica's largest processor of green beans originating from the Blue Mountain and high mountain regions, and the largest exporter of coffee.
But in the past three years as its sales declined, the company racked up heavy losses that rose close to half-billion dollars at yearend July 2009, but fell to J$163m last year and an estimated J$1.5m loss at July 2011.
The DBJ, through its agent PwC, placed Wallenford on the market seeking to unload the debt-ridden company in June.
But in the past three years as its sales declined, the company racked up heavy losses that rose close to half-billion dollars at yearend July 2009, but fell to J$163m last year and an estimated J$1.5m loss at July 2011.
The DBJ, through its agent PwC, placed Wallenford on the market seeking to unload the debt-ridden company in June.
The coffee company has accumulated debts of J$1.6 billion, which are covered by US$36 million (J$3.09b) of assets - some of which are fixed assets acquired in the past two years while the bank and the Ministry of Agriculture restructured Wallenford's balance sheet and repositioned it for sale.
The assets have been packaged into 10 discrete bundles including farmlands, factories, pulpery, roasting and packaging plant, other buildings and trademarks.
Wallenford owns approximately 2,430 acres of land, of which 405 acres are under coffee cultivation. It operates factory and processing facilities, several farms in the Blue Mountain region, a pulpery, property located on Marcus Garvey Drive in Kingston, and the Wallenford brand.
DBJ's preliminary information guide states that Wallenford's annual operating revenues for the last six years averaged US$8.7 million.
DBJ's preliminary information guide states that Wallenford's annual operating revenues for the last six years averaged US$8.7 million.
In late August, a company representative at PricewaterhouseCoopers said he expected that any bids for Wallenford would likely be "submitted at the last minute, as is the practice in Jamaica".
Meanwhile, Reynolds said that announcement is to be made "soon" in relation to the Mavis Bank Coffee Factory Limited (MBCF), whose sale to the Pan Jamaican Investment Trust-Jamaica Producers Group consortium was approved in April by Cabinet.
The DBJ is selling its 70 per cent stake, amounting to 408 ordinary shares, while the Munn family is expected to retain its 30 per cent holdings.
MBCF's assets were valued at about US$20 million ahead of the sale.
MBCF's assets were valued at about US$20 million ahead of the sale.
The company, which operates from 12 acres of land at the foothills of the Blue Mountains, sells some 1.4 million pounds of green beans annually and markets its processed beans and instant coffee under the Jablum and MBCF brands.
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