Monetgo Freeport was previously listed on the Jamaica Stock Exchange but dumb politically appointed directors made a stupid decision to have the company delisted on the basis that it would save money and the assets would be sold off and the company liquidated.
Several years have so far elapsed and the company is yet to be wound up but the more than 1,600 shareholders cannot trade their shares as there is no organized market to do so, thanks to the poor decision made by former board members, but the current board don’t seem to be leading the company any better than the previous one.
The company has $327 million worth of property being held for sale so it will be some time for the winding up to take place. Amounts held on deposit for the purchase of property is $399 million, backed by funds held in escrow. The current board rather than pay more dividend from the excess cash the company holds, is recommending that no payment be made, another poor decision. The funds have not been invested for maximum returns, as they just sit in bank deposits earning under 6 percent interest per annum and now even less with fall in interest rates, being paid on deposits. That makes no sense, when there are other assets that could enhance shareholder’s value.
Freeport should be returned to the Stock Exchange with a new mandate and UDC could cash out their shares by the company buying them back.
The financial statement up to March this year, shows profit of $10.5 million down from $45 million in 2016 with income falling in 2017 to $40 million from $92 million in 2016.
The question to be answered is why would a company that is virtually inactive need to have 10 directors that is another indication of poor management. There seems no need to be more than 6 but the company needs to have management refocus their attention in a different direction than they are current on.
Appalling corporate action
Dividend from Montego Freeport
Montego Freeport plans on paying a dividend of 10 cents per share in the form of a capital distribution, on September 12, to members on the register at August 24. The payment is subject to approval by members, at the company’s annual general meeting to be held on August 21.
More than $2 is still left to be paid over to shareholders, when the company which is slated for liquidation is wound up. Montego Freeport reported profit of $12 million for the year to March this year and $28.9 million in 2013. The bulk of the income came from gain on sale of property. An amount of $23 million was written off as a result in a fall in value property, held for resale and booked in 2014, based on the price obtained for the sale of some of the lots compared to the value booked previously.
The directors’ report to shareholders, indicates that all lots have been sold, but the sale of a few of them have not been closed. At the end of March 2014, Freeport had net assets on its book of $1.39 billion or $2.47 per share and cash funds amounting to $491 million or 87 cents per share. There was $843 million due in receivables, $794 million of it represents amounts held in escrow, relating to funds received on the sale of property and assets held for sale amounting to $620 million. Amounts due to creditors and shareholders amount to $620 million, $527 million of it represents deposits on the sale of land.
Montego Freeport was previously listed on the Jamaica Stock Exchange but was delisted in January 2012, after the company’s shareholders voted in 2011 to have it delisted.