Ciboney Group Limited, a failed company with no income, is playing hard-ball with the real-estate market in a bid to force better offers on the sole asset left on its books.

Chairman Errol Campbell told frustrated shareholders at the company's annual general meeting on Tuesday that the company is still trying to sell the 16.2-acre property in Culloden, Westmore-land, but refuses to do so at a discount.

The beachfront property was valued at $215 million in April, he said, but the highest offer received since its listing on the market in 2006 was $106 million.

No giveaway

"The truth of the matter is, we do not plan to give away the land," said Campbell.

"If we were to sell it for the $106 million, what it means that there would be no surplus of share-holders to get anything. Actually, it will be used to repay the loan and other liabilities that the company has. We are trying to get as close as to the $216 million that it is valued at."

Campbell is also general manager of FINSAC, a rescue agency set up by government after the 1990s financial sector crash to clean up poor performing institutions and assets.

Ciboney has some 12,000 shareholders with FINSAC holding a majority 70 per cent.

The company is listed and trades with some frequency, but the stock is valued at four cents, though it trades within a band of once one and six cents.

Its expenses triple annual income of $2.9 million, its deficit, which is accumulating at a rate of $3 million to $4 million per year, reached $399 million at year-end May 2008.

The group comprises three subsidiaries - Ciboney Hotels Limited, Leisure Operators Limited, and Luxury Resorts Enterprises Limited, which in turn owns a company called Number Sixty Limited.

Ciboney was acquired by FINSAC when government took forceful control of its parent operation Crown Eagle Life Insurance Company Limited.

The take-over happened a decade ago and shareholders are running out of patience.

Cat-and-mouse game

One shareholder at the AGM charged the Ciboney board with playing a "cat-and-mouse" game.

Another asked if the company had considered selling the land to the Government.

A third man wanted to be reassured that the company would be wound up.

"Could you give the shareholders some hope, at least encourage us that something is likely to happen, even that is better than nothing at all because right now, we think we are all in the deep blue sea," he said.

Campbell responded that Ciboney was holding out for an offer closer to $200 million.

"The best I can tell is that if and when we can sell the land, it will be close to $200 million, there will be a surplus of somewhere in the region of $30 to $40 million to be shared among the shareholders," he said.

Potential deal

Director Geoffrey Messado told shareholders that the company would make its plans public within two to three months, saying a potential deal could emerge.

"There is an avenue - the land can be sold," he said.

"It is possible that Finsac will have some solution to that, there can be joint development of the property and the final analysis, there will be a surplus to the shareholders and there is some value in the shares itself," Messado told the meeting.

Messado said there were no plans to delist the stock, as there was interest in the company continuing to trade.

Some 546 million Ciboney shares trade under the stock ticker CBNY.

"People were making offers for the company to continue to be listed," he told the Financial Gleaner.

"One of the problems was that they were more interested in the company (for the shares) rather than all the assets."

dionne.rose@gleanerjm.com