Wehby
Dennise Williams, Staff Reporter
GRACEKENNEDY AND the National Insurance Scheme are to partner to rescue the troubled Dyoll Group, according to reports reaching Wednesday Business.
However, GraceKennedy is only interested in the insurance arm of the Dyoll Group.
Earlier reports of a restructuring deal with Canadian Mutual Fund AIC and GraceKennedy did not materialise.
The Dyoll Group is in the midst of a financial crisis stemming from claims presented by clients in the Cayman Islands from damage caused by Hurricane Ivan in September last year. The claims total about $850 million while the company has equity of about $600 million. Last month the Jamaica Stock Exchange (JSE) suspended trading Dyoll stock.
The group is made up of Dyoll Insurance Company Ltd.: Dyoll/Wataru Coffee Company Limited; Cayman Insurance Centre Limited (incorporated in the Cayman Islands) and Seville Development Corporation Limited (property development).
Neither executives at GraceKen-nedy or NIS would confirm the proposed partnership. According to GraceKennedy's chief financial officer Don Wehby: "I can't comment on that. I am subject to a confidentiality agreement and I can't comment until the deal is finalised."
Mr. Wehby said however that the deal is focused only on Dyoll Group's subsidiary, Dyoll Insurance Company. "The intent is not to buy the Dyoll Group. Our only interest is in Dyoll Insurance Company," he emphasised.
GraceKennedy is already in the insurance business as it owns the Jamaica International Insurance Company Limited (JIIC). "And we consider insurance one of the corner stones of the financial services sector," said Mr. Wehby. "Dyoll Insurance Company has a good book of business; we want to buy Dyoll Insurance as a going concern."
According to him, his team will present a due diligence report to the board of directors at JIIC which will then make a recommendation to the GraceKen-nedy board.
But would the name Dyoll disappear and the book of business become a part of JIIC? Said Mr. Wehby: "I can't give details; I can only say that the Dyoll brand is strong in the insurance business."
So does this mean that the Dyoll Group shareholders end up in the property development and coffee business?
We first asked one of the largest shareholders in the Dyoll Group, the National Commercial Bank (NCB), about the way forward. NCB currently owns 46 per cent of the group. However, NCB executives said their chairman, Michael Lee Chin, had publicly stated that NCB would be involved in the management of Dyoll.
Next Wednesday Business spoke to a financial analyst about the prospects for the Dyoll Group. The analyst said: "If you take the insurance business from the group, what will the group be worth? Yes, they may get cash from GraceKennedy but how much could they really get? All GraceKennedy is doing is buying the insurance liabilities. I mean it makes perfect sense for GraceKennedy to jump on an opportunity like this; but for Dyoll shareholders, there would really be nothing left. Even the coffee farm was hit by Hurricane Ivan, so without Dyoll Insurance company there is nothing."
MAJOR SHAREHOLDERS IN DYOLL
National Commercial Bank proprietary a/c 27,048,095
G.L. Investments 7,761,545
Trading a/c -National Insurance Fund 1,554,877
G.L. Investments Limited 1,442,790
Mayberry Investments Limited a/c 09022 1,325,578
Mayberry Managed Clients Account 845,719
Island Life Superannuation Fund 634,763
Guardian Life Limited: a/c general fund 587,956
Gleaner Co. Superannuation Fund 564,861
National Insurance Fund 423,480
National Insurance Fund 400,000
West Indies Trust Co. Ltd. a/c WT 40 360,000
Jamaica Money Market Brokers Ltd 314,805
Estate Edward Ashenheim 312,238
Gleaner Company Limited 300,000
National Insurance Fund 300,000
NB: There are 60,921,714 ordinary Dyoll stocks in issue.
Dyoll faces JSE probe
Editor's note: The following is a press release from the Jamaica Stock Exchange:
THE JAMAICA Stock Exchange has not received to date, the additional information requested from Dyoll Group Ltd. since its recent suspension.
Trading in Dyoll's shares was suspended on February 15, 2005 because of its failure to provide material information to the JSE in keeping with the Exchange's Policy Statement on Timely Disclosure (JSE Rule Book Appendix 8).
The JSE's policy requires that a listed company must disclose material information concerning its business and affairs, "forthwith upon the information becoming known to management." Under Rule 119, 'Interpretation of Rules', it is the Council of the JSE that is vested with the authority to interpret the rules of the exchange.
The JSE's Executive Chairman, Roy Johnson, in a letter to the Acting Chairman of Dyoll, Peter Lawson, on February 17, requested that the JSE be provided with additional and substantial information on the issue as information Dyoll had released to the press was insufficient.
"The rules of the exchange provide further, that news releases 'should contain sufficient details to enable media personnel and investors to appreciate the true substance and importance of the information so that investors may make informed investment decisions,'" the letter stated.
"While there is reference to 'material loss' which will 'impair its capital base' you have not provided the exchange with any indication of the amounts involved", the letter continued. Dyoll has not been forthcoming with this information.
Further, the JSE has indicated to Mr. Lawson that it, "intends to investigate trading in the shares of Dyoll Group Ltd. to determine whether any connected parties executed trades in the company's stock since the event to which you referred, which has caused a material loss".
The executive chairman said that the exchange is on record and has reminded all listed companies that it continues to administer its rules in keeping with the proper development of the market and the enhancement of corporate governance.
