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News
Paragon’s parent company in perilous state
The news that Paragon Wines & Spirits is to close throws into question the ownership of several significant spirits interests as well as the UK distribution arrangements for the numerous wine producers it represents.
Wine producers such as Trimbach (Alsace), De Ladoucette (Loire) and Quinta de Noval (Port) are having to arrange new UK distribution channels, but the parlous state of Paragon’s ultimate parent company, CL Financial of Trinidad, also raises questions about what will now happen to the ownership of Hine Cognac and Burn Stewart, which produces the Bunnahabhain, Deanston, BlackBottle, Tobermory and Ledaig Scotch brands. Trade rumours suggest that Paragon will now seek to concentrate on spirits.
CL, which is best known globally for its Angostura Bitters brand, is the largest privately held conglomerate in Trinidad and Tobago and one of the biggest privately held corporations in the entire Caribbean. Its assets include banking and insurance and were estimated to worth be about $100m before the credit crunch hit. CL bought Paragon in 2004 as part of its plans to develop a global distribution network, but Paragon’s expertise was in wines rather than the spirits businesses on which CL wished to focus. This difference of emphasis is thought to be at the root of the departures last year of Paragon’s founders, Anthony Dee and Slim (Peter) Williamson.
The global financial crisis, however, has hit CL Financial hard and a rescue plan has been mounted by the Trinidad government, which has yet to discover the full amount of CL’s indebtedness. Once that is known, a restructuring plan will be drawn up, which could include the sale of many assets, including possibly the spirits interests held through CL Global Brands.
At present, the CL rescue is mired in political controversy. The Opposition in Trinidad has opposed the rescue package and last week it was alleged that Trinidad and Tobago’s finance minister, Karen Nunez-Tesheira, presided over the bailout of the group while remaining a shareholder in the conglomerate. At the same time, the implosion of CL, which is run by Lawrence A Duprey, an advocate of pan-Caribeean cooperation in world markets, is threatening the stability of Trinidad’s total economy and the country’s international credit rating.
Finance on Friday, 20.03.09