Student Living Limited to List
John Lee, the chairman of 138 Student Living Limited, says the start-up property company will float at least 20 per cent of the shares on the Jamaican stock market to satisfy a condition stipulated by project financier, Jamaica Mortgage Bank.
The offer is awaiting regulatory approval.
The company is already working on its first project under public-private partnership with the University of the West Indies, Mona to build finance, construct and operate 1,584 units of student accommodation in three phases.
The mortgage bank and National Commercial Bank Jamaica are providing debt financing of $1.3 billion for the first phase of student flats, some 576 units, which are to be ready for occupation by 2015.
Construction was launched in September.
Lee, a chartered accountant, said the Mona project will house students of the university.
138 Student Living expects to raise up to $500 million from the sale of 82.9 million ordinary shares and 33.68 million preference shares which are targeted for listing on the main market of the JSE. The prefs will mature in 30 years.
The pricing of the offer will be disclosed at the publication of the prospectus, which is slated for this Friday, November 14, said Lee.
Lee said Student Living is owned by parent K Limited and "professional partners who will each give up about one fifth of their holdings in order to satisfy the offer".
K Limited is owned by the Lee family including, John, Marrynette, Nikeisha and Tara, according to Companies Office of Jamaica records.
Companies Office records also show that the shareholder with the most equity in 138 Student Living itself is architect Douglas Stiebel with 32.6 million shares followed by Kingsley Thomas with 22.5 million shares.
Thomas is a former managing director of the Development Bank of Jamaica and was once chairman of the National Housing Trust.
K Limited also holds 2.04 million shares in Student Living; surveyor Dean Burrowes has 6.52 million shares; civil engineer Barrington Brown, eight million; electrical engineer Kevin Donaldson, 800,000 shares; project consultant Enith Martin-Williamson, 6.25 million shares; accountant Novelette Anderson, 3.33 million shares; project manager Helene Beach, five million shares; a Patricia McIntosh, 3.33 million shares; and surveyor Delvert Wallace, 6.52 million shares. The company was incorporated on August 15, 2014.
The equity capital to be raised on the stock market, said Lee, will not be used to retire JMB/NCB debt, as the company has already negotiated a 20-year loan with FirstCaribbean International Bank for that purpose. The FirstCaribbean financing will only kick in after the first phase of the student housing project is completed. Lead financial advisers for the housing project is PricewaterhouseCoopers Tax and Advisory Services Limited.
JMMB Securities Limited is lead broker of the 138 Student Living IPO.
The property company is expected to generate revenues from the rental of the units to students, which will be denominated in United States dollars, starting at US$395 per month.
UWI Mona has granted 138 Student Living a 30-year concession, with a potential extension of the agreement to 65-years, after which the company will transfer ownership of the housing units to the university free of cost.
Under the concession agreement, UWI has guaranteed 90 per cent occupancy of the constructed units for as long as the agreement with 138 Student Living is in place.
The company has hired Prime Development Limited as contractor for the housing project, Douglas Stiebel of Stiebel and Company Limited as architect, and project engineer Kevin Donaldson of Donaldson Engineering Limited.
K Limited has been involved in construction for the over 10 years. Its projects include apartment complexes in Kingston, among them Wellington Cove and Wellington Landing, Lee said.