A U.S. bankruptcy judge on Tuesday approved the $62 million sale of Limetree Bay refinery to a Jamaican oil storage company that intends to restart the refinery, Reuters reported. Private-equity investors had poured $4.1 billion into reviving the aging U.S. Virgin Islands facility, which was shut down by U.S. environmental regulators after a botched restart earlier this year. West Indies Petroleum, along with Port Hamilton Refining and Transportation, was named the winning bidder on Saturday by Limetree after a second auction was conducted over the weekend.
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.