Bil­lion­aire in­vestor Michael Lee Chin is three months ahead of sched­ule on debt re­pay­ment. Dono­van Perkins, pres­i­dent and chief ex­ec­u­tive of­fi­cer of Pan Caribbean Fi­nan­cial Ser­vices, says the ear­ly pay­ment should com­fort in­vestors. AIC Bar­ba­dos Ltd has sig­nalled its in­ten­tion to re­deem an­oth­er US$19 mil­lion owed to bond­hold­ers, but is not dis­clos­ing the source of the cash for the pay­ment. The fi­nal US$60 mil­lion should be re­deemed with­in an­oth­er 16 months.

The 20 per cent prin­ci­pal pay­ment will be made on the same date as the next in­ter­est pay­ment, on Sep­tem­ber 11, three months ahead of the re­vised sched­ule agreed last year af­ter AIC went in­to tech­ni­cal de­fault on some of the bonds. In­ter­est will be paid at 13.25 per cent. "With the in­ter­est pay­ments on sched­ule, this pay­ment of prin­ci­pal ahead of sched­ule and with ad­e­quate se­cu­ri­ty re­main­ing in place, peo­ple who were ner­vous be­fore should feel com­fort­ed," said Dono­van Perkins, chief ex­ec­u­tive of­fi­cer of Pan Caribbean Fi­nan­cial Ser­vices.

Un­der the new sched­ule, 30 per cent was paid out last De­cem­ber; an­oth­er 20 per cent was to have been paid on De­cem­ber 11, 2010 but will now be paid next month; and the fi­nal, 50 per cent by De­cem­ber 11, 2011. AIC Bar­ba­dos, the ve­hi­cle used by bil­lion­aire Michael Lee Chin for Caribbean fundrais­ing and in­vest­ment, will in­cur no penal­ty for the ear­ly re­demp­tion of the sec­ond in­stal­ment, hav­ing giv­en more than the re­quired sev­en days' no­tice to trustee Pan­Car­ibbean. Pan­Car­ibbean ad­vised bond­hold­ers of the pay­ment by cir­cu­lar is­sued Au­gust 10.

"The is­suer has now giv­en no­tice to the trustee that they in­tend to pay be­fore the due date an ad­di­tion­al 20 per cent of the orig­i­nal prin­ci­pal val­ue of notes held by each note hold­er on the next in­ter­est pay­ment date," the trustee said. Perkins said Tues­day that the up­com­ing re­demp­tion would amount to US$19.27 mil­lion, nar­row­ing the out­stand­ing debt from US$79.42 mil­lion at Au­gust 1 to US$60.15 mil­lion.

Last year, Lee Chin missed three dif­fer­ent dead­lines for the re­pay­ment of a ma­tur­ing US$42 mil­lion of the bonds that were is­sued some sev­en years ago. In De­cem­ber, fol­low­ing months of ag­i­ta­tion by cred­i­tors, in­clud­ing just over 100 Ja­maican hold­ers of the AIC Bar­ba­dos bonds, the Ja­maican-Cana­di­an in­vestor ham­mered out an ex­ten­sion agree­ment to stretch out pay­ments of prin­ci­pal and in­ter­est on the bonds over two years to De­cem­ber.

Prin­ci­pal pay­ment

AIC Bar­ba­dos made a 30 per cent prin­ci­pal pay­ment of US$46.5 mil­lion at the time, with in­vestors re­buff­ing Lee Chin's pro­posed 12 per cent in­ter­est rate and de­mand­ing a pre­mi­um 13.25 per cent in­stead. With 877 mil­lion shares of his 64 per cent stake in Na­tion­al Com­mer­cial Bank al­ready on the line, hav­ing been pledged as col­lat­er­al, Lee Chin slapped down sug­ges­tions that his new­ly ac­quired shares in Man­ulife, the Cana­di­an in­sur­ance and fi­nan­cial ser­vices gi­ant, be of­fered up as fur­ther back­ing for the debt to sup­port his 12 per cent of­fer.

Ear­li­er, prime re­al es­tate, NCB Tow­ers, in New Kingston and a 20 per cent stake in ca­ble op­er­a­tors Colum­bus Com­mu­ni­ca­tions had al­so been pledged as col­lat­er­al. Con­tact­ed for a com­ment, AIC Bar­ba­dos of­fi­cials de­clined to com­ment on the source of the cash to be used to pay down the debt on Sep­tem­ber 11. Perkins al­so de­clined com­ment, say­ing such dis­clo­sures were AIC's to make.

Up to De­cem­ber last year, the planned sale of Lee Chin's stake in Colum­bus from which he said he in­tend­ed to ho­n­our the bond debt, had not ma­te­ri­alised. "I apol­o­gise to note­hold­ers, I'm sor­ry to put you through any in­con­ve­nience, but the Colum­bus sale did not come to fruition," Lee Chin had told Ja­maican cred­i­tors in Kingston.

(Ja­maica Glean­er)