JF Mills to pay former shareholders this month

THE Jamaica Flour Mills (JF Mills) said this week that the long outstanding payments to former shareholders of the company from an insurance claim lodged following Hurricane Gilbert nearly 12 years ago, should be made some time this month.

The company's managing director, Jack Cwach, said however, that they were trying to get a consensus from the former shareholders as to the amount of money which should be paid out.

Shareholders who have been agitating for a firm date as to when the payments would be made, telephoned the Financial Gleaner earlier this week suggesting that they were expecting the money would have been paid out by the end of May. However, Mr. Cwach said no such information was communicated to them.

Early last month, Mr. Cwach told the Financial Gleaner that the payments should start within four to six weeks, but in the interim, the company had hired chartered accountants and management consultants, Ernst & Young, to calculate the sums which should be paid out.

Mr. Cwach also said then that funds collected from the insurance claims have been lodged in an interest-bearing account, which meant that shareholders would benefit from any interest accrued thereon.

The insurance claim arose from the destruction of two silos at the Flour Mills plant in eastern Kingston as a result of Hurricane Gilbert, which ravaged the island in September 1988.

In an effort to obtain a settlement, the Flour Mills had launched legal action against a consortium of its insurers led by West Indies Alliance Insurance Company for both material and consequential losses. The matter was contested up to the final appeal court, the United Kingdom Privy Council, which made its ruling in May 1998.

Before the ruling, the company has reportedly told former shareholders that settlement of the claims could total some $400 to $800 million, resulting in their getting as much as $1.37 per share. However, the Privy Council judgement was for just $51.1 million, with interest of some $223 million. This means the amount to be paid to shareholders will be substantially less than was anticipated.

Mr. Cwach, who heads the local arm of ADM Milling company, which acquired 90 per cent of the shares of JF Mills in late 1997, was quoted a few months ago as suggesting that the total payment to former shareholders would be less than $100 million.

In February this year, the Financial Gleaner reported that the Jamaica Stock Exchange (JSE) had called on JF Mills to state just when the former shareholders of the company would receive the payment promised to them by ADM Milling.

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