CAP to pay off a large portion of debt in lay up to Jamalco alumina refinery’s listing on the Jamaica stock exchange

According to a recent report, Co-owner of Jamalco alumina refinery, Clarendon Alumina Production Limited (CAP), will pay off a large portion of its debt. This will improve its overall equity position in the lay up to the refinery’s planned listing on the stock exchange.

The company will secure the funds for paying off the debt from the Government of Jamaica, GOJ. Through CAP, the Government is a partner with Noble Group in the refinery.

“CAP, through a loan from the GOJ, will repay debt obligations due to the Noble Group, in the amount of approximately US$136.7 million,” said Minister of Finance and Planning Dr Nigel Clarke in a statement to Parliament this week. “The transactions improve CAP’s equity value,” he said.

CAP holds 45 per cent of Jamalco, while the Hong Kong-based Noble Group holds 55 per cent via subsidiary General Alumina Jamaica. Both of them, with Noble as operating partners, fund the capital-intensive operations for bauxite mining and refining alumina.

The Financial Gleaner was informed on Thursday, August 13, about the Government’s preparations for the budget for repayment purposes of the debt. However, the listing of Jamalco is not going to happen this year, said some sources.

The refinancing announced by Clarke is projected to reduce Jamaica’s debt stock by 1 per cent.

Clarke said, “It is anticipated that after the incorporation and listing of Jamalco on the Jamaica Stock Exchange, the Jamalco entity will build the technical capacity to market its own alumina. It is intended that by the time the three-year marketing agreement ends, the technology transfer will have occurred for Jamalco – in which the GOJ, Noble, and, by that time, others are invested – to profitably market its alumina.”

Earlier this year, Noble Group had signed an agreement with the Jamaican Government to reorganise the assets and operations of Jamalco alumina refinery into a holding company as a precursor to the eventual listing of the refinery.