Derrimon Trading offers $2 preference shares
Derrimon Trading Company Limited will open invitation for 125 million preference shares on February 27, from which it hopes to raise $250 million.
The invitation will close on March 13.
It is the company's third fundraising in less than two years, including a $200m bond placement and prior to that a $150m IPO in 2013.
The redeemable preference offer is priced at $2 per share.
The stock will pay fixed dividend at 11.75 per cent per annum in the first and second years of issue, while the third year will be paid out at a floating rate calculated at two per cent above the weighted average Treasury bill yield.
Tania Waldron-Gooden, senior vice-president of corporate financing, research and special projects at Mayberry Investments Limited, the firm that advises Derrimon, said the returns took into consideration the need to satisfy investor appetite.
"Remember the devaluation of the dollar is something else, so you have to give investors some kind of premium to compensate for them not going into USD," Waldron-Gooden, said while noting that the market's current appetite is for investments denoted in the stronger currency.
"The first dividend payment on the preference shares will become due and payable on March 31, 2015. Thereafter, dividends will be paid quarterly on the 30th day of each month.
Derrimon intends to list the shares on the junior stock exchange, provided the company raises at least $90 million from the subscriptions and meets other requirements of the Jamaica Stock Exchange.
Derrimon will use the proceeds to refinance debt on which it currently pays interest ranging as high as 22.88 per cent.