Dec 2012 Financial News

Lascelles' plan is to upgrade, not build refinery

Dec 06, 2012

J Wray & Nephew said a project to be undertaken by a Lascelles deMercado subsidiary in order to meet certain requirements of the National Environment and Planning Agency, relating to its licence to operate a distillery, is an upgrading venture and not construction of a new facility.

The provision is made as part of the Lascelles group capital commitments, according to the notes to the audited financial statements for the year ended September 30, 2012.

Managing director of J Wray & Nephew, Paul Henriques, told The Gleaner yesterday that the note referred to plans to upgrade equipment in the existing distillery. Managing director of Lascelles, Fraser Thornton, also clarified yesterday that the investment represents the continual upgrade and capital investment to its existing distillery.

In the financial statements, Lascelles noted that "at September 30, 2012, $102 million (2011: J$907 million) had been authorised for capital expenditure by various subsidiaries, of which $102 million (2011: $200 million) had been committed, for which no provision has been made in these financial statements".

In addition, "At September 30, 2012, the Board of Directors of a subsidiary had approved, but not committed, capital expenditure of approximately US$5.9 million in respect of Phase I of a project, pursuant to meeting certain requirements of the National Environmental Planning Agency relating to its license to operate a distillery."

Lascelles further noted that "This expenditure is expected to be incurred in the next twelve months. The total capital cost of the project is approximately US$10.8 million with annual operating costs estimated at J$35 million. The project is expected to be completed in two years with an estimated useful life of twenty years."

Last month, the Italy-based Campari Group made a public offer to acquire all ordinary and preference shares of Lascelles' core assets. The offer was expected to be closed last Friday, but has since been extended to December 10.


Source:
Jamaica Gleaner
Thursday December 6, 2012

http://jamaica-gleaner.com/gleaner/20121206/business/business2.html