Ciboney Up For Grabs

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Ciboney beachfront

In recent news, it was announced that the Financial Sector Adjustment Company or FINSAC was interested in abandoning their interest in Ciboney Group Limited [JSE: CBNY] by the sale of their shares.

The company is currently inactive, but the line of business had included acquisition, development and rental of resort properties. However, due to debt issues, the company was forced  to sell off their assets for repayment. All but one was sold.

Ciboney currently has one piece of land on the south coast, very close to the Sandals Whitehouse resort in Negril which is now up for sale once again. It is described as beachfront property, a little over 16 acres, suitable for the construction of villas or a residential area and is valued anywhere between JMD$200- 250 Million. Investors are invited to bid for this piece of land.

Most importantly, FINSAC has majority interest in Ciboney through three other companies. They have invited interested investors to submit their offers for acquisition of its entire shareholding on April 30, 2018. If a purchaser is found and the transaction is successful, majority ownership of the company will be diverted from Finsac to the successful party within Q1 of the new financial year beginning on June 1, 2018.

This majority stake transfer can be somewhat of a good sign for Ciboney. This shifts management and decision making to another party or entity that can make positive changes for the company. It can enable the company to restore operations and allow for a 360-degree turn.

SSL is currently not bullish on CBNY; we do not recommend investors to buy. However, we must watch to see who acquires the company and what this move will do for the company’s lifespan, spare price and overall business.

The current bid and offer of CBNY are $0.12 and $0.14 respectively.


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