Will Michael Lee-Chin lose his stake in NCB?

In case you missed it, Jamaican billionaire Michael Lee-Chin is in a high-stakes showdown with bondholders. They’ve given his companies a firm deadline: come up with US$94 million by December 31, or risk losing more than a billion shares in NCB Financial Group.

Here’s what’s going on. Three of MLC’s companies owe more than US$364 million to bondholders.  These are AIC (Barbados), Portland (Barbados), and Specialty Coffee Investment Company.

Those loans are secured by just over one billion NCBFG shares. That represents about 40% of the bank’s stock and is essentially MLC’s controlling stake.

Remember, a bond is basically a loan that investors give to companies, repaid with interest on set dates.  In this case, Lee-Chin used his NCB shares as collateral. 

But he’s now missed several payments, which is how the outstanding amount ballooned to US$364 million. Naturally, bondholders are getting frustrated.

A bondholder committee led by Sagicor CEO Chris Zacca has offered MLC more time, but only if he pays the US$94 million first. That covers about US$19 million in overdue interest and US$75 million of the principal.

The catch? The extension isn’t guaranteed. Bondholders from 14 separate note issues have been meeting since early December to decide whether to approve the deal.  Voting is expected to wrap up by December 11.

If the vote passes and MLC pays the US$94 million, his NCB shares go into what’s basically a legal lockbox until the full debt is cleared at the end of 2027. 

Meanwhile, any dividends from those shares would be redirected to help pay ongoing interest. In that scenario, Lee-Chin keeps control of NCBFG, bondholders get their money back over time, and Jamaica’s capital market lets out a sigh of relief.

But if he doesn’t make the payment, there’s almost no room to negotiate. The proposal reportedly includes a strict no-flexibility clause. It’s pretty much a “if yuh slip and yuh slide” situation. Miss the payment, and that could mean the NCB shares get seized and sold.

And this isn’t just a big money problem. NCB is one of Jamaica’s largest financial institutions.  A forced reshuffling of ownership could shake the stock market, rattle investor confidence, and create ripples across the region.  I’ll keep you updated.

And that’s the bottom line.