THE ANALYSTS: How long can Ciboney hold on?

THE ANALYSTS: How long can Ciboney hold on?

Ciboney Group will have an important decision regarding its future on the Jamaica Stock exchange come December if it does not find a new buyer.

Ciboney is currently a shell company, having no assets. It previously held properties in the tourism sector as the major investor in Sandals Ocho Rios and Ciboney Hotels.

The majority of its shares are held by the Financial Sector Adjustment Company (FINSAC). FINSAC announced last month that they were finalising a deal with an interested buyer for its shares in Ciboney; however, that deal has since fallen through.

Speaking on Taking Stock with Kalilah Reynolds, Business Writer at the Jamaica Observer, David Rose noted that Ciboney will have to pay fees from its dwindling funds to the JSE come January in order to remain a listed company on the stock exchange.

According to Rose, Ciboney only has about $1.2 million in cash currently.

“The thing is whenever Ciboney stock price goes up that kinda brings it closer to its end because listing on the JSE is not free,” he said.

“You have to pay listing fees which are actually tied to your market capitalization. So the greater value Ciboney has the more it costs in listing fees which are payable at the start of each year,” he added.

According to the JSE, the annual listing fee for companies with a market capitalization between $500 million to $1 billion is $352,107.

In addition to listing fees, Rose also noted that the company is due to host its Annual General Meeting with shareholders. The company was granted an extension for the meeting from June to October.

Ciboney’s stock price jumped as high as $1.59 following news of the potential buyout but quickly tumbled after the deal fell through. Ciboney closed at $0.77 on Wednesday, July 6.

“We don’t know how long Ciboney can actually hold on between paying their fees and everything else before they have to just declare bankruptcy,” Rose said.

He said that while there is still hope for Ciboney as the company is already listed on the JSE and has a large and active shareholder base, there are several realities to consider.

“How fast can they do another bid that follows government regulations but satisfies the ability to sell within a particular time to allow the company to still be operational?” he questioned.

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Sashell Williams2024-09-03T21:40:31-05:00