- Cabinet approved the sale of Wallenford in April
- The deal will see the cash payment of some US$16 million to the Jamaican Government
- AIIL assumed control of the Wallenford operations on September 11, 2013
The Government-owned Wallenford Coffee Company has been divested to AIC International Investment Limited (AIIL) in a deal valued at just over $4 billion.
AIIL is a subsidiary of Portland Holdings Inc., which is owned by local businessman, Michael Lee-Chin.
Managing Director of the Development Bank of Jamaica (DBJ), Milverton Reynolds, outlined the details of the divestment on Wednesday, September 18, during a Jamaica House press briefing held at the Office of the Prime Minister.
Mr. Reynolds informed that Cabinet approved the sale of Wallenford in April, but at the time, there were still sensitive issues to be discussed before a final agreement could be reached.
He informed that the deal will see the cash payment of some US$16 million to the Jamaican Government, with the purchaser to make a further capital injection of some US$23.5 million over a four-year period, for the expansion of the company and coffee production.
AIIL assumed control of the Wallenford operations on September 11, 2013 and the transaction is expected to close within the next six months.
With the divestment of Wallenford, the Government is now entirely out of any commercial activity regarding the coffee industry. The divestment of the Mavis Bank Coffee Factory was finalised in 2011.
Mr. Reynolds informed that the focus now by the Government, through the Ministry of Agriculture and Fisheries, will primarily be on the regulatory side to ensure that the quality of Jamaica’s Blue Mountain brand is protected.
“It also means that the government will no longer have the obligation of providing financing for Wallenford, which, over the years, has been a significantly underperforming asset. So we’re very happy that we have finally concluded this divestment,” the DBJ head said.
The coffee company had accumulated losses of $2.36 million and net assets of $67.75 million up to February.
Wallenford is Jamaica’s largest coffee estate and largest processor of green beans originating from the Blue Mountain and high mountain regions.
The 250-year-old Wallenford brand has access to over 5,000 acres of Blue Mountain coffee land and has the capacity to process over nine million pounds of coffee in its facilities.