Dennise Williams, Staff Reporter
REPUTED TO have a surplus of $2 billion, the Cable & Wireless pension fund controls some of the most valuable assets in New Kingston: The Towers on Dominica Drive, New Kingston Shopping Centre, and the Cinema Two lands also on Dominica Drive.
According to several licensed valuators, these properties are real estate jewels. The Towers, covering about 100,000 square feet is estimated to be worth $375 million. Average rental is $350 per square feet. Cinema Two lands encompass about six to eight acres and are valued at $20 million to $30 million per acre.
The New Kingston Shopping Centre also could fetch rents on average of $350 per square feet and the property covering around 40,000 square feet is estimated to be worth $100 million.
KEY PROPERTIES ACQUIRED
Highly placed sources at Manufacturers Sigma Asset Management Ltd (MSAML), one of the managers of the C&W pension fund, revealed to Sunday Business that last year the pension fund acquired several key properties from the Financial Sector Adjustment Corporation (FINSAC).
FINSAC was established in 1997 by the Government to restore the stability of the financial sector. Restoration included the sale of assets and rehabilitation of companies where viable.
Explained our source, "In the 1990s, the pension fund was owed money by Mutual Security Bank (MSB). When the bank failed, the pension fund decided to sue. The Government asked the pension fund to hold off and not interfere with what they planned to do through FINSAC. In exchange the pension fund was given an undertaking to provide value for the debt held. So last year, four properties were transferred to the pension fund, consisting of the Towers, New Kingston Shopping Centre, the Cinema Two lands and 61 Half Tree Road."
However, mention of this transaction was not placed in C&W's 2003 annual report. In relation to the pension fund, all that was mentioned was the annual pension contribution of $70 million in 2003 and the restated amount of annual contribution for 2002 of $155 million.
Herbert Hall, manager of MSAML, stated that, "We are managers of part of the fund along with two other gentlemen. When you look at annual reports, for any company in Jamaica, reference to the pension fund will only be done as a note on the balance sheet and there will never be any mention of details. And as to the value and composition of the fund, I won't tell you that and neither will C&W."
NO WORD YET
Indeed, messages left by Sunday Business to the pension fund department at C&W were not returned. MSB, a subsidiary of Mutual Life Insurance Company was taken over completely by National Commercial Bank (NCB) in 1996. The take over, which began in 1993, was done by way of a share swap where 4 NCB shares were given for every 3 MSB shares and a cash purchase of outstanding shares at a rate of $12.00 per share. The parent of MSB, Mutual Life Insurance Company collapsed in 1998 and FINSAC assumed its debt and those of its subsidiaries.
