The Finsac-controlled Ciboney Group Limited has drawn down the US$272,000 that was held in escrow since the sale of the hotel property was finalised in December 2005 with Rios Hotel Management.

The hangover funds - US$250,000, which has grown interest in the bank account in which the money was held - have now been reinvested, said Errol Campbell, the operational head of Finsac and chairman of Ciboney.

"The funds in escrow were being held to rectify a restrictive covenant following the sale of the property some years ago," said Campbell. In fact, there were two covenants, one of which was lifted subsequent to the sale transaction while the other was due to be heard in court back in October 2007.

"The matter was recently finalised and the funds have since been transferred to repos," Campbell told the Financial Gleaner on Tuesday.

The near 18-year-old hotel property was leased and operated under the name Beaches Grande Sport at Ciboney, then later sold to hotelier Gordon 'Butch' Stewart, after state bailout agency Finsac assumed control of the outfit under a rescue package for its parent Crown Eagle Life Insurance Company.

Redistribution

The redistribution of the escrow funds was reflected on Ciboney Group's balance sheet of November 30, 2008, which showed an approximate $20 million fall in cash balance to $1.5 million and a near corresponding gain on resale agreements from $31 million to just under $50 million.

Ciboney, with no income other than returns from its financial investments, continued to rack up losses in the half year of more than half a million dollars between June and November, but as the value of the Jamaican dollar faltered, forcing central bank governor Derick Latibeaudiere to mount several rescue attempts, the situation created an opportunity for Ciboney.

On the back of foreign exchange gains totalling $3.8 million, the group ended the second quarter