Lee-Chin to meet with coffee bondholders
Published:Wednesday | November 13, 2024 | 12:05 AM
Investor Michael Lee-Chin plans to meet with bondholders over the delayed repayment of the Specialty Coffee Investment Limited bond.
Lee-Chin, the principal owner of Specialty Coffee, said the meeting will provide updates and answer questions from investors directly.
“For that particular note, we are going to call a noteholders meeting. I will be present, and I will explain where we are and whatever questions they want answered,” he said in an interview with the Financial Gleaner. He added that the meeting would focus on establishing a timeline for the repayment of the bond’s principal.
“I have been doing this for the past couple of years. I will speak to the noteholders myself. If they have any anxiety, they will hear me directly,” he said.
Lee-Chin has faced pressure from bondholders, who, in June, rejected a proposed 12-month extension of the bond’s maturity date to October 2025. Specialty Coffee initially issued bonds in 2021 to refinance $1.9 billion in debt. The bond was split into multiple tranches with varying interest rates. For instance, a local currency tranche of up to $500 million was priced at 9.75 per cent interest, while a US$8.7 million tranche was priced at 7.25 per cent interest. There is also another local currency tranche of $184 million at 9.75 per cent.
In correspondence dated October 31, JCSD Trustee Services Limited said it was awaiting formal written requests from at least 25 per cent of noteholders to call an official meeting. At that meeting, noteholders can “pass such resolutions as may be required to recover the sums”, stated the JCSD Trustee letter signed by Trustee Services Manager Jevaughn Leon.
“This is to advise that we have not received from the issuer any further correspondence or commitment in respect to the principal repayment and or outstanding interest which became due,” it stated.
General Manager of JCSD Trustee Services Andrea Kelly told the Financial Gleaner that they were still awaiting the next move from bondholders.
“Noteholders must instruct us to convene this meeting. We await their instructions,” Kelly said.
The bondholders previously rejected Lee-Chin’s request for another extension to pay out the bond and called for immediate repayment.
The 2021 bond replaced the original bonds from 2016, which raised $1.8 billion at 9.5 per cent interest, used for acquiring Mavis Bank Coffee Factory for $1.3 billion and meeting working capital needs.
Lee-Chin’s coffee assets include Wallendford Estate and Mavis Bank Coffee Factory. The latter business was acquired by Specialty Coffee from Jamaica Producers Group and Pan-Jamaican Investment Trust in 2016.
Mavis Bank, a major producer of Jamaica Blue Mountain coffee, has been operational for over 90 years, maintaining strong trading relationships with Asia, Europe, and North America. The factory’s green beans carry its name while its roasted beans are branded as Jablum.