So it appears that Michael Lee Chin’s NCB shares are safe… for now.

Jamaican billionaire Michael Lee Chin has finally made the US$94 million payment due to bondholders, halting any talks of him losing his majority stake in NCBFG… for now.  That US$94 million included about US$19 million in overdue interest and US$75 million of the principal.

Bondholders are owed more than US$364 million. Those loans are secured by about one billion NCBFG shares, which Lee Chin used as collateral. That represents about 40 percent of the bank’s stock.  It’s essentially his controlling stake.

The JCSD Trustee Services confirmed that it received the US$94 million in full on Friday, January 23. They are acting as the noteholders of AIC (Barbados), Portland Barbados, and Specialty Coffee Investment Company.  Payments to bondholders have already started going out.

The original deadline was December 31.  When that day came and went, a lot of people were side-eyeing MLC.  But he did have a 45 day grace period.

Now the payment is good news for bondholders and for Lee Chin, but it’s by no means over.

Like I said, the final number is just over US$364 million. This US$94 million payment was just step one. It was a goodwill gesture to the bond committee to show intent so that they don’t seize the shares.  Step two would be another lump sum payment and another deadline.

Now we should also note that there was no specification on where the money came from. Did MLC borrow the money?  Or did he sell some of his shares?  Or other assets?  We don’t know.  We’ve been talking about him potentially losing control of NCB if he didn’t make the payment.  But what if he’s already losing control by being forced to sell some of the shares to make the said payment?

Well, however he got the money, the news has had a positive effect on NCB’s stock price so far. It closed trading on January 28 at $43.91.  That’s up 9% from $40.15 on January 20.  

And this is interesting because to be fair, MLC’s personal issues with making this payment have nothing to do with NCB’s performance as a business. 

Even if he was to lose control, NCB would continue business as usual.  In fact, they’ve been having one of their best years ever.  But it does say a lot that investors have been conflating the two issues and basing their confidence in NCB on Lee Chin’s ownership and leadership.

And that’s the bottom line.