JAM | Dec 19, 2023

iCreate’s mounting debt, poor management triggered receivership switch

/ Our Today

Reading Time: 2 minutes

Durrant Pate/Contributor

iCreate has become a victim of its rapid expansion, which has caused its debt to balloon beyond its capacity to repay, thus landing the company into receivership.

The Tyrone Wilson-led creative media company had sought financing from Sagicor Investments through a J$24-million bond to aid in its expansion. The medium-term, fixed-rate bond was for five years at an interest rate of 12.5 per cent.

In addition, the company also got short-term financing from Dolla Financial Services and Wilco Finance Limited. From 2021 to 2022, iCreate has been paying down on its debts to these three entities, with the payments due moving down from J$28.19 million in 2021 to J$15.2 million in 2022.

However, iCreate has now defaulted on its debt to Sagicor Investments, which has taken the reins at the company, which has been on an aggressive expansion drive. This expansion drive has been fuelled by acquisitions in GetPAID in 2022 and Visual Vibes in June this year.

A third acquisition was supposed to have taken place with the planned purchase of Execution Limited, headed by businessman Kevin Frith, but this was later botched after acrimonious differences developed between Wilson and Frith.

Spike in interest costs

These acquisitions were in part financed through interest-bearing debt, which has resulted in financing costs in 2023 rising above the comparative period in 2022. Financing cost for the third quarter of 2023 was J$9.7 million compared to J$0.7 million for the similar period in 2022.

Tyrone Wilson, president and CEO of iCreate Limited. (Photo: Facebook @iCreateEDU)

This was mainly due to the costs of J$7.3 million incurred on the vendor’s note used to close the Visual Vibe acquisition. Additionally, during the first and second quarter of 2023, iCreate utilised short-term financing of J$38.3 million to advance the acquisition of Visual Vibe, adding J$0.9 million to finance costs.

The costs of J$0.4 million incurred on the preference shares utilised in the acquisition of GetPAID further contributed to the increase. In 2021, the repayment owing to Sagicor was J$24 million, but this was trimmed to J$20 million last year.

Sagicor concerns at iCreate

In addition to the debt default, informed sources tell Our Today that Sagicor is most concerned with recent events at the company, such as its suspension from the Jamaica Stock Exchange, delays in the submission of financial statements, and the summarily dismissal of board members and staff by Wilson.

When contacted by Our Today, Wilson, who was guarded in his response, would only say “we have no comment on this time on leaked information coming out of the regulatory authorities but the company will issue a release in due course”.

Our Today is reliable informed that a crucial position would have been taken on Visual Vibes at a board meeting today.

Sagicor has appointed chartered accountant and management consultant, Kenneth Tomlinson, as the receiver.


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