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Citrus deal sours

mialisafenty, [email protected]

Citrus deal sours

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Barbadian beverage conglomerate Banks Holdings Limited (BHL) is prepared to sell its shareholding in a Belize citrus company.
But both BHL chairman G. Anthony King and managing director Richard Cozier have reported that despite indicating it wanted to acquire the shares, the Citrus Growers Association of Belize (CGA) were yet to make a firm offer.
As a result, the Barbados business executives say they are prepared to take “other steps” if an offer does not materialise. BHL and CGA own Citrus Products of Belize Limited (CPBL), but the two have had a stormy relationship, which has included court action and the intervention of the Belize government.
News of BHL’s willingness to sell its minority shareholding came simultaneous with an indication that CPBL’s profit in 2012 turned to losses last year, in addition to the fact that the company’s audited financial statements 2013 were not delivered on time.
Blaming the CPBL losses on “a reduction in the size of the 2013 crop and a softening in commodity pricing”, King said the failure to receive the audited financial statements meant that BHL’s auditors “used their latest management accounts but have necessarily issued a qualification in respect of this”.
“An important development with CPBL is that our relationship with our partner . . . . which is the majority beneficiary owner of CPBL, has reached the stage where we have indicated our willingness to sell our shareholding to them. For many months the CGA have been signalling their desire to acquire BHL’s shareholding but we still await a financially qualified offer. Should the CGA not be in a position to acquire BHL’s shareholding, we will have to take other steps to determine a resolution,” he said.
Cozier said there were “a number of differences” between his company and its Belize partner “which are impacting the process of decision-making by both CPBL’s board of directors and its shareholders.
And like King’s comments on the possible shareholding sale, he said, “We . . . await a binding offer, including confirmation of finance together with certain other matters, failing which BHL shall seek other avenues to resolve the situation.”
But despite this and other challenges, including “the difficult trading environment and the ongoing costs associated with the pursuit of operational efficiencies”, BHL’s financial position “strengthened considerably over the year”.
“Working capital virtually doubled and we retired some $6.3 million in debt including $4 million in long term debt while recording a positive cash flow of $7.4 million,” he noted.
The managing director also pointed out that BHL’s revenues “increased modestly by $2.4 million or 1.3 per cent for the year. However, when combined with lower operational costs, an improvement of $7.5 million in the profit performance of the parent and subsidiary companies was achieved over the prior year”.
“Unfortunately, this improvement was negated by a reduction in the share of income from associates and a tax charge versus a tax credit last year,” he explained.
King and Cozier also reported recently that during the first quarter of the group’s 2014 financial year revenues “remained at the same level as for the comparative period in the prior year while pro­t from normal operations increased by ten per cent.
“Restructuring costs of $1.3 million relating to the reorganisation of our distribution system were however incurred and this arises from the continuing work being done to improve efficiencies in the group. Interest charges were lower for the quarter following the reduction in debt during the prior ­financial year,” they said.

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