Ceiba Investments Proposes Bond Restructuring to Avoid Default Amid US-Cuba Tensions

Ceiba Investments seeks 12‑month bond extension as US‑Cuba tensions bite

Ceiba Investments Limited (ticker: CBA) has warned it is unlikely to meet the €5 million principal payment due on 31 March 2026 on its existing bond instrument, given a sharp deterioration in Cuba’s operating environment. The Board plans to consult bondholders in February with a formal proposal to amend terms and avoid a potential event of default.

The backdrop is ugly. Since President Donald Trump took office in 2025, the US has toughened its hard-line policy on Cuba, reinforcing sanctions, limiting travel and financial flows, and – most critically – restricting energy supplies by blocking oil from Venezuela and threatening tariffs on countries supplying oil to the island. Ceiba says this latest squeeze is potentially “catastrophic” for Cuba’s infrastructure and economy unless it is relaxed.

While the Company believes the US administration appears to be seeking a negotiated settlement with Cuba, there is no agreement and it is not clear if talks are ongoing. That uncertainty around fuel, electricity and basic inputs feeds directly into tourism and commercial activity – and Ceiba’s ability to run its assets profitably in the short term.

Why sanctions matter for Ceiba’s hotels and offices

Ceiba invests in Cuban commercial and tourism real estate. Its portfolio includes 2,235 hotel rooms across five Melia-branded hotels in Havana, Varadero and Trinidad, plus the 56,000 m² Miramar Trade Center office and retail complex in Havana.

Operationally, the Company says all six assets remained “relatively positive and profitable” during FY25 and into the current year. However, aggregate income has been “substantially lower than anticipated”, and expected cash inflows in Q1 2026 won’t cover the upcoming bond payment.

Energy constraints are the choke point. If fuel and electricity are scarce, flights, transport, hotel operations and offices all feel it. Ceiba plainly flags a “material impact” on the prospects of the Cuban tourism industry in 2026 – which is a clear warning for near-term earnings and cash generation.

The bond crunch: what Ceiba is proposing

Ceiba’s existing bond instrument is split into segments. The Company faces the second principal tranche, Segment B, of €5 million plus interest on 31 March 2026. To avoid a potential event of default, the Board will consult bondholders on changes designed to buy time and preserve cash for operations.

Proposed amendments to the Bond Instrument

• Extend the term by 12 months – defer each of the four remaining segments (B, C, D and E) by one year.
• Permit issuance of new ordinary shares up to 10% of current issued shares.
• Permit asset sales, with proceeds applied to repay the bond.

Ceiba also states it aims to maintain sufficient cash reserves to safeguard operations for up to one year, given the “very high degree of uncertainty” in the near term. No details were provided on any changes to coupon, covenants, fees or security – not disclosed.

Shareholders vs bondholders: who bears what?

For shareholders

• Dilution risk: authorising up to 10% new shares would dilute existing holders if the equity tap is used.
• Operational uncertainty: management is signalling 2026 could be challenging for Cuban tourism. Even though assets have been profitable, the Company expects weaker-than-planned cash generation.
• Asset sale option: selling part of the portfolio could crystallise value, but timing and pricing in a stressed market are uncertain. Proceeds must go to bond repayment.

For bondholders

• Payment deferral: a 12‑month push-out on all remaining segments means delayed principal repayments.
• Recovery focus: equity issuance and permitted asset sales are explicitly aimed at supporting repayment – positive for recoverability.
• Default risk if no deal: without bondholder consent, the 31 March 2026 payment becomes the pressure point.

The numbers at a glance

Announcement date	5 February 2026
Ticker / ISIN / LEI	CBA / GG00BFMDJH11 / 213800XGY151JV5B1E88
Upcoming principal due	€5 million (Segment B) plus interest, due 31 March 2026
Proposed change	12‑month deferral of Segments B, C, D and E
Potential equity issuance	Up to 10% of current issued shares
Asset sale permission	Allowed, with proceeds to repay the bond
Debt outstanding to bondholders	€20 million (as referenced at 30 June 2025 within NAV context)
Unaudited NAV	USD 125,700,785 at 30 June 2025 (31 Dec 2024: USD 129,968,866)
Deferred management fees (included in NAV)	USD 2,503,950 payable to Aberdeen
Portfolio	2,235 hotel rooms across five Melia hotels; 56,000 m² Miramar Trade Center

Context: inside information now public

This update was released under UK MAR – the Market Abuse Regulation that governs inside information. On publication via an RNS, the information entered the public domain. In plain English: everyone now has the same facts, and the Company has flagged a material risk around its upcoming bond payment.

Key risks, catalysts and what to watch next

• Bondholder consultation in February 2026 – the key near-term catalyst. Look for voting thresholds, timelines, and any sweeteners (not disclosed).
• US‑Cuba policy signals – any relaxation on energy flows could quickly improve operating conditions; conversely, further tightening would be negative.
• Q1 2026 cash flow performance – Ceiba says it will be below needs; any upside surprise would help.
• Equity issuance clarity – whether the Company actually raises up to 10% new shares, and at what price (not disclosed).
• Asset sale plans – which assets, potential valuation, and timing (not disclosed). Proceeds must go to bond repayment.
• Operational resilience – despite headwinds, assets were “relatively positive and profitable” in FY25; can that hold if power and fuel remain constrained?

Josh’s take: pragmatic move in a tough spot

This is an honest reset. Ceiba is signalling that Cuba’s energy squeeze has become a binding constraint, and it would rather preserve cash to keep hotels and offices running than drain liquidity to meet a principal payment in March. That is sensible from a going-concern perspective, but it shifts pain to creditors via a proposed deferral and to shareholders via potential dilution.

There are some offsets. Allowing equity issuance and asset sales to repay the bond is creditor-friendly, and the portfolio has continued to trade profitably, if below expectations. If the geopolitical backdrop improves, the Company could muddle through and restart repayments on the new timetable.

The flip side is clear: if bondholders resist, default risk rises into 31 March 2026. For investors on either side of the capital structure, the next update on the consultation will be crucial. Until then, this is a case study in why macro risk matters – and why liquidity is king when the lights flicker.