Micheal Lee-Chin’s Investment pays off

When Micheal Lee-Chin bought NCB I am not sure he dreamt that  in six-years his investment would pay off so quickly.  The Observer presents a very interesting peice worth reading

Yesterday, National Commercial Bank’s (NCB’s) share price closed on the Jamaica Stock Exchange (JSE) four cents lower than the day before. But for Michael Lee Chin, the price of $23.94 a share was more than seven times the price he would have paid per share back in 2002 when he bought a majority stake in the bank.

How much did he purchase NCB for in 2002?

Lee Chin bought a75 per cent stake in NCB back in 2002 for US$127 million (J$6 billion in 2002), of which US$56 million (J$2.65 billion) was made as a downpayment.

How much did he actually pay down to purchase his stake in NCB?

Considering that only J$2.65 billion was paid down, earnings from dividends and share sales would have taken care of the rest of payments that were made in tranches over the years following 2002, reflecting an even higher return on his initial investment.

The discussions will rage whether or not it was a good deal for Jamaica but for Micheal Lee-Chin, the deal has more paid off.

Source: NCB deal eightfold

2 Responses

  1. This is Mike true form .

    I went a forum that he was guest speaker and he mad e few statements that have resonated with me since then.

    1. ” You cannot become wealthy by working for someone”.

    2. ” Use others people money, to make money. Understand Leverage and use it wisely”.

    3. ” Your abilty to make money, even while your sleeping, is one sure method that can lead one to becoming financially independent”.

    Did he get a steal on NCB, maybe but, that is how investments work. You buy a an asset below book value if you can, which makes it easy to generate a profit on your investment in a relatively short period of time.

  2. Lee Chin didnt get a steal on NCB. He paid what it was trading at on the JSE at the time…Jamaican investors neva wanted to take the chance he did. That bank was for sale for anyone who wanted it. All he got from the Government wasa commitment to liquidate a portion of the FINSAC notes that were in the bank. Full stop. Anybody else who came would have got the same deal. The Gov’t negotiated strong and hard in that sale, and the deal was the best avlb at the time. What options did Jamaica have? We forget how desperate things seemed in 2002, when memories of the meltdown were still burned in people’s minds and all were shellshocked from it. In that environment, MLC took a chance. Good for him. Where were our local investors with the courage to take that chance?

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