Claude Clarke, chocolate maker, has owned Highgate Foods for 30 years. The company was placed in receivership Wednesday. - File
Jamaica Redevelopment Foundation, the company that acquired the Finsac debts, has placed Claude Clarke's Highgate Food Products into receivership.
But Clarke insisted yesterday that the move would not jeopardise a deal for Desmond Blades' Mussons (Jamaica) Ltd to take an equity stake in the company, thus injecting badly-needed capital.
"The arrangement took fully into account the possibility of our creditors moving against us," Clarke told the Financial Gleaner. "Nothing changes. The discussions and agreement will go ahead."
Clarke acquired Highgate in a 1976 management buy-out when the English confectionery and food company, Cadbuary, left Jamaica at the height of the democratic socialist experiment of the People's National Party (PNP) administration led by the late Michael Manley.
For years Highgate had control of the local market for chocolate bars, but began to loose market share with the economic liberalisation of the early 1990s.
The company, according to Clarke, really fell under severe pressure during the high interest rate regime of the mid to late 1990s that resulted in the financial sector meltdown.
"The economy was in trouble and we were in trouble," Clarke said.
He did not disclose the extent of the company's troubles, but yesterday other sources suggested that Highgate now has debts of over $100 million.
"There's a $10 million here, a $15 million there, another $8m hereÉ," one source said. "There were a series of loans over several years."
On Wednesday JRF, the American company that had bought most of the debt the government acquired when it bailed out failed banks and insurance companies, sent receiver Ken Tomlinson of Business Recovery Services Limited into Highgate to take charge of the company.
That was less than 24 hours after Clarke had issued a statement, via the public relations agency ProCom, that Highgate and Mussons Jamaica were advanced on a joint venture deal for a distribution and 'financial partner'.
Neither Blades nor his executives have commented on the statement, and Clarke did not provide specifics of the prospective deal, telling the Financial Gleaner on Wednesday that the talks remained delicate.
"We had for a long time been talking to a long list of interest parties locally and overseas, that is, in the Caribbean and the US," Clarke said. "But the manufacturing situation in Jamaica is not attractive so it has been difficult to find a partner who had both the interest, the money and the values."
He suggested that he had now found such a partner in Blades' Musson which did not only have the cash, but distribution synergies in Jamaica and across the Caribbean and into Central America where Mussons either has subsidiaries or does business
"We have also lost market share precisely because of our inability to finance a marketing and distribution programme," Clarke, a former minister of trade, said on Wednesday. "Our capacity is significantly under-utilised."
It was not immediately clear, how Tomlinson, who has been favoured for such assignments in the past by JRF, would proceed with the receivership. He declined to comment on the assignment.
However, Clarke, had praised his company's capacity to manufacture fine chocolates. "We blend all kinds of chocolate to produce a distinct flavour," he said.
business@gleanerjm.com
