Two meetings of groups of creditors of indebted Ocho Rios attraction Mystic Mountain Limited, MML, held during the past week, have failed to resolve issues related to whether the beleaguered company will be declared bankrupt and its assets sold off to repay bondholders and other persons and institutions it owes money, the Jamaican Gleaner reported. Unresolved, too, is whether MML's changing payment proposal to settle its debt will be accepted by the creditors. Likewise, the status of the trustee the company chose to oversee that process is still not settled.
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Jamaica
Creditors of indebted Ocho Rios attraction Mystic Mountain are scheduled to meet today in a bid to change the trustee in bankruptcy named last month by Mystic Mountain Limited, MML, as part of a proposal to settle nearly US$14 million, or approximately $2.1 billion in debt, should the company be declared bankrupt, the Jamaica Gleaner reported.
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When Denis O’Brien sold out of Ireland’s biggest newspaper group in 2019, the billionaire drew a line under an investment that had cost him more than €450m. Now the country’s richest man faces crunch time again as Digicel, the Jamaica-based mobile phone company he launched in 2001, struggles to refinance the company in the face of its $6.7bn debt, the Financial Times reported. The company was once a cash cow for Mr O’Brien.
Businessman Denis O’Brien’s Digicel may seek to refinance at a discounted price some $1.3 billion (€1.2 billion) of bond debt due to be repaid in early 2021, to take advantage of the fact that they are trading at a discount in the market, according to US debt research firm Xtract Research. However, such a move would be considered by debt ratings agencies as a more aggressive distressed debt manoeuvre than the one completed by Digicel earlier this year, The Irish Times reported.
The prior instalment of this sovereign insolvency blog trilogy concluded that "output foregone" is huge in highly-indebted IMF programme countries with high growth potential, the Financial Times reported. That is because in such cases, IMF programme design prioritises debt recovery ahead of activity. It imposes exorbitant primary surplus targets, wrecking the balance between primary spending and low taxes that is necessary to realise high productive potential. Jamaica is a case in point.
Denis O’Brien’s saw its debt burden increase in the three months to the end of December as earnings dipped, increasing pressure on the telecoms group as it seeks to lower its borrowings ratios, The Irish Times reported. The Jamaica-based group, which completed a massive debt restructuring earlier this year, told its bondholders on Wednesday that its net debt amounted to 6.8 times earnings before interest, tax, depreciation (ebitda) at the end 2018, its fiscal third quarter, according to sources.
The House of Representatives on Tuesday passed the new Insolvency Bill, repealing the current Bankruptcy Act and creating a legal environment for the use of insolvency laws, the Jamaica Observer reported. Jamaican law on bankruptcy and insolvency is currently contained in two pieces of legislation: the Bankruptcy Act, which covers personal and individual insolvency (inability to pay debt); and the Companies Act, which contains provisions to deal with the winding up of insolvent corporate bodies. The new act consolidates those provisions.
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The proposed changes to Jamaica’s bankruptcy and insolvency law has been overhauled after several deficiencies were pointed out by stakeholders, The Gleaner reported. The bill, which seeks to repeal the existing bankruptcy law and to create new provisions to govern the regulation of bankruptcy and insolvency in Jamaica, has been criticised by stakeholders, and Justice Minister Mark Golding told the Senate last Friday that given the large number of amendments proposed in the 113-page report, it was decided to prepare a new bill.
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Chief Executive Officer of the Jamaica Public Service Company (JPS) Kelly Tomblin says that the pressure from stolen electricity across the island is driving the power company into insolvency, the Jamaica Observer reported. Tomblin, speaking at a press conference at JPS’s New Kingston headquarters Thursday, said that in the two-year period 2012/2013 the power company lost US$73 million to stolen electricity. “The ship is going to sink under this weight. If this continues it might mean insolvency,” Tomblin declared at the company’s Knutsford Boulevard headquarters.
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The Joint Select Committee (JSC) to review the Bankruptcy and Insolvency Bill is scheduled to have an all day meeting today at Gordon House, starting at 10:00 am, the Jamaica Observer reported. The committee was named last month after the Bill was tabled in the Senate by Minister of Justice, Senator Mark Golding. It is comprised of 14 members from both the House and the Senate, but is chaired by Minister of Industry, Investment and Commerce, Anthony Hylton.
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