The Matalons’ philosophy held to the principle of employing maximum effort with minimum capital. They had limited personal funds so built their businesses very successfully through leverage. The high interest regime imposed by the Government of Jamaica in the 1990s plus the volatile exchange rate threatened the viability of the business. It was at this time that the ICD Group, through a newly created parent company, Mechala Group Jamaica Limited, became the first Jamaican company to attempt an Initial Public Offering (IPO) on the international capital markets. Market conditions were not at the time conducive to such an issue however and the Company therefore opted to undertake a bond issue in 1996 with the intention to pursue an IPO when market conditions became more favourable. Joseph A. Matalon and his cousin Joseph M. Matalon were jointly awarded the inaugural Jamaica Observer’ Business Leader award in 1996 for the success of the bond issue, a first in Jamaica.
The Mechala Group had three principal lines of business: the Development & Construction Division comprised of WIHCON, Redimix, Northern Aggregates, Tropicair and CAC; the Manufacturing and Trading Division consisted of Facey Commodity, Universal Stores, Butterkist Biscuits, Serge Island Dairies, Serge Island Farms & P.A. Benjamin. The Financial Services Division of the business consisted of Industrial Finance Limited, Sigma Investment Management, Sigma Unit Trust Managers, Prime Life Assurance Company and British Caribbean Insurance Company Limited.
During the period 1996 – 1999, the Jamaican economy experienced the most significant recession in its history and despite best efforts Mechala was unable to bring the group to the level of profitability required to meet the interest payments of the bondholders. By the end of 2000 Mechala sought an arrangement with bondholders to accept US47¢ on each dollar they invested in settlement of amounts owed. The scheme was eventually approved by the Supreme Court and consummated shortly thereafter. The restructuring and reorganisation of the ICD Group now began in earnest.
Although the Mechala Group initiative was not a success, it was the first time a Jamaican company successfully raised funds on the international market and paved the way for others to follow.
The ICD Group now led by Joseph M Matalon who assumed the Chairmanship of the Company in 2000, was forced to dispose of many of its subsidiaries in order to liquidate and reduce debt and return the Company to profitability. Facey Commodity, Butterkist, Universal Stores, P.A Benjamin, Serge Island Dairies and Farms, Tropicair, CAC, Redimix and Northern Aggregates were all sold. Sigma merged with Manufacturers Merchant Bank, the Prime Life insurance portfolio was sold to Guardian Life. The companies remaining in the ICD Group were WIHCON, BCIC, CGM Gallagher and WIHCON Properties. Over time, and through the implementation of a number of partnerships, only WIHCON Properties remained wholly owned by the Group.