MAY 1 - SANGSTER INTERNATIONAL
AIRPORT PRIVATISED
THE Airports Authority of Jamaica (AAJ) said an agreement with MBJ Airports Limited, the new operator of the Sangster International Airport, would become effective on Saturday, April 12.
Under the agreement, MBJ Airports Limited assumed full responsibility for the day-to-day management and operations of the airport and for the capital development of the facility.
The MBJ Airports team, the AAJ said, brings to Jamaica and the airport a wealth of operations and construction experience. Among the members is Vancouver Airport Services, the operator of the Vancouver Airport in British Columbia, Canada, which is rated among the best airports in North America by the International Air Transport Association (IATA).
The group also includes Agencias Universales S.A., the majority shareholders in Santiago de Chile International Airport and a large service provider to cruise ship operators in South America; Grupo Dragados of Spain, which has investments in several international airports, and Ashtrom of Israel, which has had a long relationship with Jamaica through its local subsidiary Ashtrom Building Systems Limited.
NEW POLICY FOR NHT LOANS
Kingsley Thomas, the chairman of the National Housing Trust (NHT), announced that from May 1, only two persons could apply for a loan under the new policy governing the trust's loan and home acquisition policy.
The amount available to contributors seeking a loan was increased from $800,000 to $1 million. Two persons could thus apply for $2 million.
In the past, three persons were able to co-apply for any one property and receive a combined figure of $2.4 million. With the new policy, the two persons who are applying have to be related, Mr. Thomas said.
TAXING PROBLEMS
The widening of the GCT net and the imposition of a four per cent cess on imports which became effective on May 1, announced by Finance and Planning Minister Omar Davies at the opening the Budget Debate on April 17, met with stiff resistance. Private sector lobbying got the four per cent import cess changed to a two per cent non-refundable fee in May. The cess, which had become effective on May 1, was replaced by the customs processing fee, effective June 1.
Dr. Davies also announced a climb down from the plan to charge GCT on a number of pharmaceutical drugs, medical aides and agricultural inputs.
To cover a $1 billion shortfall, Dr. Davies instead imposed a 15 per cent GCT levy on the gambling industry, expecting to rake in some $2 billion.
Gaming industry executives responded in May saying the new levy would tilt the playing field in favour of illegal vendors who did not have to pay taxes or finance overheads.
MAY 14 CARIB CEMENT ANNOUNCES INVESTMENT PLANS
The Caribbean Cement Company announced in May that it would be investing US$100 million at its Rockfort plant in eastern Kingston over the next three years as part of a general thrust to improve productivity and efficiency, according to general manager Anthony Haynes.
MAY 30 KGN WHARVES BATTLE WARMS UP
The battle for control of the destiny of Kingston Wharves took a new turn in May when Grace, Kennedy & Company filed two actions in the Supreme Court to prevent the voting of certain shares at the Kingston Wharves annual general meeting scheduled for June 20.
Grace, Kennedy & Company, the single largest shareholder in Kingston Wharves, had controlled the board for over half a century. But a group of shareholders, including Charles Johnston, the chairman of Jamaica Fruit & Shipping, had demanded a change in the structure of the board to accommodate others with substantial investments in the company.
The group said they were also pushing for an extraordinary general meeting of the company to remove seven of the 12-member board and replace them with seven nominees in case they were not entertained at the annual meeting.
DOLLAR CRISIS HITS
The Jamaican currency experienced major difficulties in 2003 and it was during the month of May that the crisis reached its climax.
At the start of May, the exchange rate was J$57.66 to the U.S. dollar, a decline in the rate of $6.69 from the start of the year. This represented a 13 per cent depreciation from the start of the year.
Just three weeks later, on May 16, the exchange rate had peaked at J$67.22 to the U.S. dollar. This amounted to a 17 per cent decline or $9.56 for that short span. By comparison, the fall was $3.57 for all of 2002.
Following the decline to the May 16 low, an aggressive intervention strategy turned the tide.
The Bank of Jamaica (BoJ) sold an undetermined sum of U.S. dollars into the foreign exchange market at $65.95 to the U.S. dollar the following Monday, after a weekend announcement by the Prime Minister that the BoJ would use the country's Net International Reserves to supply foreign exchange to the market. He said the Ministry of Finance would also issue a U.S. dollar indexed bond to renew investor interest in the Jamaican money market.
Indexed bonds have normally been denominated in Jamaican dollars but linked to the U.S. dollar, giving investors security against devaluation, an attractive feature when there is uncertainty about the exchange rate.
Following the intervention, Jamaica's exchange rate slide reversed direction and within a week, the selling rate was J$59.49 to the U.S. dollar.
MAY 9 NEW TELECOMS VENTURE CRANKS UP
Steve Twomey and his partner Patrick Terrelonge, who heads InfoChannel, in May began to build momentum on their new venture, Reliant Communications Ltd. After the deregulation of the telecoms sector in March, Reliant became one of the first companies to acquire a licence and one of the first to invest in its own network. Mr. Twomey told the Financial Gleaner the new company would offer domestic and international broadband data services, as well as international voice and other advanced services to corporate, small and medium enterprises.
JUNE KINGSTON WHARVES CHANGES BOARD
Grace, Kennedy & Company announced in early June that a new 11-member board, to be chaired by company executive Brian Young, had been formed for Kingston Wharves, as part of a May 30 agreement to resolve a shareholder disagreement over the structure of the board The new board included five members of the consortium that had been seeking to remove seven of the existing 12-member board and to replace them with seven nominees.
In a release, Grace, Kennedy and shareholders in the consortium, challenging its control of Kingston Wharves, said the new board would comprise Brian Young, chairman, and Roger Hinds, Kim Clarke, Charles Johnston, Harry Maragh and Grantley Stephenson as well as Rafael Diaz, Douglas Orane, Don Wehby, Robert Kinlocke and Philip Alexander, representing Grace, Kennedy.
Grace also stated it would give up its management contract with Kingston Wharves, which would expire at the end of August.
JUNE 5 TELESERVICES IN RECEIVERSHIP
PricewaterhouseCoopers' John Lee was appointed receiver of Teleservices Jamaica Ltd. by Rex James, president of the National Investment Bank of Jamaica (NIBJ) in June. operate with the receiver to fulfil the 'mutual objective of recovering NIBJ's investment in the company'.
He said that the call centre company being placed in receivership would not disrupt the services it provides. Teleservices, which has received an injection of nearly $400 million over the last few years, last year slashed hundreds of jobs to level off at about 500.
The financial difficulties were said to have been the result of a downturn in business in the United States, which is its primary market.
JUNE 12 RUGBY JAMAICA LIME FOR SALE
Rugby Jamaica Lime and Minerals Limited was put up for sale in June, following a decision by majority owner RMC Group Plc. of London, that it wanted to exit the local lime business, which it originally entered by default.
RMC acquired a 61 per cent majority interest in the Clarendon-based limestone processing operation when it bought out Rugby Group in 2000. But it held back on plans to sell the then fledgling Jamaican plant until the business had gained a more solid footing.
Rugby Jamaica crushes limestone almost solely for Jamalco, the largest bauxite operation in Jamaica. Jamalco represents 85 per cent of Rugby's market, which the company services under a 25-year contract.
The lime company's performance is closely linked with that of Jamalco's, and Rugby Jamaica chairman Horace Clarke said then that the losses had resulted from a shutdown of the bauxite plant in 2001.
JUNE 19 DEHRING, BUNTING &
GOLDING TAKES OVER ISSA TRUST
Issa Trust and Merchant Bank was being acquired for a minimum of $115 million, Dehring, Bunting & Golding (DB&G), chairman and chief executive officer, Peter Bunting, announced on June 11.
To be completed in June, he said the acquisition did not involve money changing hands, but was structured as an exchange of securities.
The investment bank merged Issa Trust with its subsidiary DB&G Merchant Bank, with the amalgamated entity retaining the DB&G name.
Bunting said DB&G Merchant Bank, which is the smallest of the merchant banking operations in Jamaica, was going after critical mass. Issa Trust, which had about double DB&G Merchant's asset base, was also considered an attractive buy, because of its status as an authorised foreign exchange dealer.
JUNE 20 FIRSTCARIBBEAN JAMAICA STAYS LISTED
FirstCaribbean International Bank has had a niggling problem in delisting its local subsidiary from The Jamaica Stock Exchange.
A stubborn group of FirstCaribbean International Bank Jamaica shareholders said the terms they were being offered to swap their shares for those of the parent company were not good enough. Despite a series of share offers which upped the company's holding in its subsidiary from 82.2 per cent to 94.6, the minority holdouts still had 5.4 per cent of the shares.
FirstCaribbean was hoping to make the local bank a 100 per cent subsidiary after the offer, which opened in March with an initial deadline of May 9, but was twice extended with the last closing date being June 20.
But Raymond Campbell, the country manager for FirstCaribbean Jamaica, said 1500 minority shareholders did not convert the remaining 10.3 million shares. The parent company had said it would compulsorily acquire any shares not tendered under the offer and delist FirstCaribbean Jamaica from the Jamaica Stock Exchange (JSE).
However, Mr. Campbell said they would have had to first obtain the statutory threshold of 90 per cent of the shares from at least 75 per cent of shareholders, and those conditions had not been met.
FirstCaribbean directors said the synergies that were expected from the local operation becoming a subsidiary would include rationalising of the head office functions, information technology infrastructure and other operational processes.
The exchange of 7.5 ordinary shares in FirstCaribbean Jamaica for each common share in FirstCaribbean International Bank met resistance from the outset, with at least one broker, Mayberry Investments, telling investors not to accept the offer as a 5:1 ratio was more reasonable.
FINANCIAL SERVICES COMMISSION
RULES ON KINGSTON WHARVES
The Financial Services Commission (FSC) decided in late June that the agreement by Grace, Kennedy and the other main protagonists in the battle for control of Kingston Wharves had in effect amounted to a take-over and that an offer must be made to the remaining minority shareholders.
One of the effects of the agreement is to give control of the company to the shareholders who are party to the agreement, and who together have aggregate holdings of shares in the company in excess of 91 per cent.
JULY 17 C&WJ LAUNCHES GSM NETWORK
Cable & Wireless Jamaica (C&WJ) on July 17 launched its much-anticipated GSM/GPRS network, promising customers that the technology would bring to them unparalleled service and the most advanced features of any mobile company in Jamaica.
Gary Barrow, C&WJ's president, said the GSM/GPRS network 'is the most advanced in the world', and would allow customers to access the Internet on the go.
General Packet Radio Service, (GPRS) is a system that works on a GSM network that allows for constant connectivity to the Internet at improved transfer rates.
Digicel, the leader in the mobile communications market, started its operations with a GSM system.
JULY 18 BIG FIX FOR SANGSTER AIRPORT
The new operator of the Sangster International Airport in Montego Bay, MBJ Airports Limited, said it planned to spend US$180 million (J$10.6 billion) in upgrading the facility over the next five years.
On completion, officials say, the project is expected to have a profound impact on the nation's struggling economy.
The initial programme will include the installation of six jet bridges as well as the expansion of the Immigration and Customs halls. Further development involves the construction of a 12-gate Airside Concourse complete with jet bridges, gate lounges and shopping areas, as well as four additional aircraft parking positions.
JULY 30 SEAGA LOSES GCT APPEAL
Two companies of which Edward Seaga, the Jamaica Labour Party (JLP) leader, is chairman, on July 30 lost their long-running battle with the Commissioner for General Consumption Tax (GCT).
They had been assessed as owing $30 million, plus interest, on their Enchanted Garden hotel at Carinosa in Ocho Rios, St. Ann.
The companies are Premium Investments Ltd. and Town & Country Resorts Ltd.
The ruling is that Town & Country, as the registered taxpayer, was liable to pay GCT, in respect of The Enchanted Garden, and not DHC Ocho Rios Hospitality Corporation. The companies had contended that it was DHC, an American company which operated the hotel, was responsible for paying the GCT.
AUGUST 1 DOLPHIN COVE
ANNOUNCES EXPANSION PLANS
With an assurance from the cruise ship industry that more ships would be calling on the resort town, Dolphin Cove in Ocho Rios said in August it was set to spend over $250 million on a massive expansion drive.
Built nearly three years before at a cost of US$3 million, the attraction, located close to Dunn's River Falls, has become one of Jamaica's top tourist attractions.
Manager Stafford Burrowes said the expansion will cover approximately 60,000 square feet and include a new pier to ferry passengers directly from the cruise ships into Dolphin Cove.
The attraction will develop special dive encounters in open ocean for scuba divers as is the custom in other countries. Mr. Burrowes said an education facility will also be developed where students can earn college credits doing their internship at the facility.
But the plans were met with opposition from environmentalists concerned about the impact of the development on the marine environment.
AUGUST 8 SEPTEMBER TAX
EXTENSION FOR LOTTERY COMPANIES
The island's lottery companies were given until September 1 to have their computer systems configured before the implementation of the new tax on winnings on the gaming sector.
The Finance Ministry on August 8 awarded the extension to the Jamaica Lottery Company (JLC), sellers of Lotto, Pick3 and Three Way Drop Pan and Supreme Ventures Limited (SVL), sellers of the Cash Pot, Lucky 5 and Dollaz games.
The companies argued they could not meet the previous August 11 deadline, as they needed time to upgrade their computer software.
Howard Mitchell, the JLC chairman, said that his company should be ready for a September 1 tax implementation.
Industry executives said an agreement had been reached on a 15 per cent tax on winnings from gaming.
AUGUST 14 PREMIUM CREDITORS
TO STAKE THEIR CLAIM
The creditors of Premium Investment Limited were advised to stake initial claims on the company by October 3, or forfeit any chance at collecting.
A public notice dated August 14, from the company's liquidator, Douglas Chambers, said the particulars of the claims or debts should be submitted to his Premier Plaza, St. Andrew offices.
Premium Investments was placed in voluntary liquidation by Edward Seaga, head of the Premium Group, to clear tax and other liabilities associated with Town and Country Resorts, the company that managed the resort property, Enchanted Gardens in Ocho Rios, St. Ann.
Seaga said, when he announced that he was winding up the company on August 12, that the total liabilities to be covered were below $200 million, and expectations were that a surplus of $200 million would be realised from Premium Investments after the debts were paid.
AUGUST 22 ENCHANTED GARDEN SEEKS FUNDING
Douglas Chambers, having taken over the operation of Enchanted Garden, announced in late August that he was looking to raise $5 million immediately to finance its repair in preparation for selling the assets of the resort property.
The 20-acre garden in Ocho Rios was 'resuscitated' and re-opened to tours. Chambers, the appointed liquidator for Premium Investment Limited (PIL), the company which holds the assets of the resort, is working with a three-month timeline to raise the funds and effect repairs.
SEPTEMBER 17 DIAZ QUITS
A. Rafael Diaz resigned as a director of Kingston Wharves Limited (KWL) on September 17.
Mr. Diaz resigned 'with immediate effect' from his post as director, he stated in a letter to the Stock Exchange on Monday.
The NIBJ in a release said Teleservices had agreed to co-operate
