Wed | Mar 29, 2017

JMMB owners to vote on restructuring

Published:Wednesday | August 6, 2014 | 8:00 AM
JMMB Limited Group CEO, Keith Duncan.-File

Richard Browne, Business Reporter

Shareholders of Jamaica Money Market Brokers Limited are to vote their approval of a new scheme of arrangement that will transfer their ownership in the pioneer money market firm to a new holding company.

The vote comes at the tailend of a restructuring programme that began in 2012 when the company formed JMMB Group Limited after its $4 billion takeover of the Capital & Credit group of companies.

During that time, JMMB has grown from a $125 billion company by assets to $207 billion. It also oversees $223 billlion of funds under management.

If shareholders vote yes, JMMB Group will become the ultimate parent of JMMB Limited and all its subsidiary businesses in Jamaica and overseas. The company owns insurance brokerage, banking and investment assets in Jamaica, Trinidad & Tobago and the Dominican Republic.

The group charts lists 20 corporate entities owned by JMMB Limited, including Banco Rio de Ahorro y Credita and Corporacion de Credito America (CCA), which it is in the process of acquiring.

JMMB is acquiring 90 per cent of Banco Rio and 80 per cent of CCA, both domiciled in the Dominican Republic.

Since its formation two years ago, ownership of JMMB Group has been held by JMMB chief executive officer Keith Duncan, and group compliance manager and company secretary Carolyn Dacosta - each having one share. Both are directors of JMMB Group's three-member board, along with JMMB chairman Noel Lyons.

Under the reorganisation, the 1.63 billion outstanding ordinary shares in JMMB will be swapped for equal holdings in JMMB Group. The holding company's board will be expanded to incorporate the other directors currently on JMMB's board, but DaCosta will give up her seat and assume the role of company secretary, according to the proposal laid out to shareholders.

improving efficiencies

The offer will be open to all shareholders in the three regional stock markets in which JMMB trades - Jamaica, Trinidad & Tobago and Barbados. JMMB Group will apply for listing on all three exchanges as JMMB delists.

"This restructuring allows for greater efficiencies across the group, will reduce administration costs, and will ultimately lead to greater value for our shareholders and clients," Lyon said in a letter to shareholders in the explanatory statement on the scheme of arrangement.

The move will also allow JMMB to comply with Bank of Jamaica (BOJ) regulatory requirements now that it includes a merchant bank.

The new entity will facilitate the BOJ's effective consolidated supervision of the group, allowing the central bank "full and unlimited access to information from all members of the group", Lyon said.

Existing regulations will not allow JMMB's banking and security trading arms to be "mixed up", JMMB chief financial officer Patrick Ellis told Wednesday Business.

This rearrangement will allow the regulatory bodies to have "proper oversight", he said.

If approved,the 1,630,552,530 existing JMMB ordinary shares will be cancelled and simultaneously 1,630,552,530 new JMMB Group ordinary shares will be issued, "making JMMB a wholly owned subsidiary of JMMB Group", according to the statement to shareholders.

Up to last year, the top twenty shareholders owned some 79 per cent of the company.

The ordinary shares in the new entity will carry the same rights and benefits. JMMB is currently trading at J$7.02 on the Jamaica Stock Exchange, TT$0.41 in Trinidad and BDS$0.15 in Barbados.

The move has come at little significant cost to JMMB, Duncan, told Wednesday Business on Monday.

The timeline for the change took significantly longer than first anticipated.

Back in September 2012, JMMB said that the changeover would take up to a year. But the process actually took about two years, due to the legal and regulatory hurdles that first needed to be cleared.

"It's really the time to go through the process that has caused it to take so much time," Ellis said.

The main purpose of that legal process was "to demonstrate that your shareholders aren't disadvantaged", Ellis said.

Costs were mainly to do with the legal fees concerning the legal and regulatory process, he said.

JMMB's stock does not trade in the Dominican Republic, nor does it have immediate plans to list in that market. "Nothing is in the pipeline right now," said Ellis.

The vote to approve the scheme is scheduled for September 17. The scheme is also subject to approval by the Supreme Court.

business@gleanerjm.com


TOP 10 JMMB SHAREHOLDERSAT MARCH 2014:

NCB CAPITAL MARKETS (IN ESCROW) 428,777,325 shares or 26.3%

TRUSTEES JMMB ESOP 158,324,383 shares or 9.71%

COLONIAL LIFE INSURANCE CO (TRINIDAD) LTD 103,453,776 shares or 6.34%

NATIONAL INSURANCE FUND 75,172,997 shares or 4.61%

CONCISE E.I. LTD 59,965,366 shares or 3.68%

CONCISE R.I. LTD 52,512,640 shares of 3.22%

JVF O.E. LTD 46,261,146 shares or 2.84%

SJIML A/C 3119 44,833,000 shares or 2.75%

CONCISE O.N. LTD 42,530,103 shares or 2.61%

JVF E.I. LTD 40,311,674 shares or 2.47%