Lee-Chin to meet with Portland bondholders

Businessman and investor Michael Lee-Chin is to meet with Portland Holdings bondholders for a discussion on the company’s liquidity and ending of the hiatus of dividends from NCB.

It comes amid delayed payments on bonds issued by Portland.

Lee-Chin said in an interview with the Financial Gleaner that all bond payments have been met, albeit that some were made late; and that the meeting with bondholders was being held at his request.

“Over the last three years, notwithstanding cash flow issues, we met our commitments. We might have been late, but we have met all our commitments,” he said. “All bondholders were paid.”

Portland Holdings is the company through which the billionaire investor holds his assets, including NCB Financial Group, which Lee-Chin has been pressuring to restart the payment of dividends of which he had been starved for two-and-a-half years.

He scored a win on that front last week when the board of the banking conglomerate agreed to pay a dividend of 50 cents per share, amounting to $1.23 billion. Lee-Chin and the companies to which he is connected control 57 per cent of the banking group. That proportionately would be equivalent to more than $700 million of the dividend payout that’s due to be made on December 18.

The distribution is equal in size to the last interim dividend which was issued by NCB within the pandemic era and paid out in May 2021 at the same 50 cents per share.

“I asked the Jamaica Central Securities Depository to arrange a meeting with bondholders so I can speak to them, because this dividend payment is a milestone,” said Lee-Chin. JCSD operates a trust company that acts as a trustee for certain bonds.

“In the interest of transparency, I wanted to make sure that within the milestone of the first dividend payment in three years, our lenders or noteholders should know what it means to them also, because they are a stakeholder,” the Portland Holdings chairman said.

NCB Financial owns Jamaica’s largest bank, National Commercial Bank Jamaica, as well as other banking and investment businesses.

Before the pandemic, NCB Financial paid quarterly dividends that ranged between 50 cents and a dollar per share, mainly averaging $6 billion per year in recent times.

The return to dividend payments follows the slashing of some $8 billion in recurring expenses at the bank, including employee retrenchments.

The group continues to rack up multibillion-dollar profits but has currently fallen behind its record run. For example, NCB Financial’s year to date profit over nine months ending June was nearly $14 billion, but that’s just about half the levels of a year ago when profit in the period amounted to about $26 billion. Profit attributable to shareholders were slashed in half from $19.6 billion to $9.7 billion in the same period.

Additionally, the prevailing interest rate environment has led to fluctuations in the capital markets, which in turn has put pressure on NCB’s buffers. The banking group’s capital equated to around 10.2 per cent of its $2.2 trillion in total assets up to June. However, its capital dips to 6.7 per cent of total assets, once the portion of the group that shareholders do not control is discounted.

Updated numbers will be released the group by today when NCB Financial will also host an investor briefing on its year end financial results.

As for the meeting with Portland’s bondholders, Lee-Chin wants to tell the company’s creditors that now that dividends are flowing there will be improved continuity of payments.

“Portland has not had a dividend for three years, but over the last three years bondholders have been paid, and we have met all our responsibilities,” said Lee-Chin.

The quantum of Portland Holdings bonds was not ascertained. However, they include two raised in 2021 and a third disclosed by a bondholder.

In 2021, Portland raised $1.9 billion for its coffee subsidiaries with the local tranche priced at 9.75 per cent and the US dollar notes at 7.25 per cent. Also in 2021, Portland Holdings raised a US$4 million in two tranches at 6.25 per cent and 6.5 per cent, with a clause that the coupons would both rise above 8.0 per cent in the event of a default.

Last week, the Financial Gleaner was informed by an investor of a late bond payment. However, Lee-Chin did not respond to the specific complaint, but asserted that all bonds were in good standing and not in default.

“Go and ask the richest person, whether they have ever been late on a payment,” he retorted. “The point is that we have never defaulted on making a payment.”

Portland Holdings includes CVM TV; Wallenford Coffee Company and Mavis Bank Coffee Factory; Trident Hotel and Blue Lagoon in Portland; Coral Springs tourism development in Trelawny; and Model Agricultural Production Limited, a super farm in St Catherine.

In 2022, Portland sold Reggae Beach, a 250-acre property in St Mary, to Barita Investments.

Portland Holdings’ financial companies include NCB Financial, National Commercial Bank Jamaica Limited, Portland Private Equity, Guardian Holdings, and Canada-based investment advisory outfits Mandeville Group and Portland Investment Counsel.

Portland Holdings is also affiliated with the Jamaica Stock Exchange-listed Portland JSX Limited, which co-invests in regional businesses alongside another Portland find known as Caribbean Fund II. Portland JSX is not connected to bond issue.

steven.jackson@gleanerjm.com