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JMMB gets shareholder nod for 6 billion preference shares

Published:Friday | September 18, 2015 | 12:00 AM
JMMB Group CEO Keith Duncan (left) and Chairman Noel Lyon look over a document at the investor briefing and extraordinary meeting held at The Jamaica Pegasus hotel in New Kingston on Wednesday.

JMMB Group Limited got unanimous approval of its plan to create six billion new preference shares, which will be floated at intervals to raise capital for the company's regional acquisitions and operations.

While JMMB has some 2.3 million of prefs unissued from the four billion units previously authorised in 2008, those were created under the corporate vehicle and then parent company Jamaica Money Market Brokers Limited.

The special meeting called to approve the shares was advised that these would be issued by JMMB Group as the new parent following the company's restructuring last year.

Shareholders were asked to approve a special resolution to issue six billion new fixed-rate cumulative redeemable preference shares. This time, the term 'fixed rate' was not included in the resolution, which Chairman Noel Lyons said would allow the company to issue US dollar or Jamaican dollar prefs with either fixed or variable rate coupons.

The resolution got 100 per cent approval from meeting participants and proxy votes on Wednesday, JMMB Group Compliance Manager and Company Secretary Carolyn DaCosta confirmed after the extraordinary meeting.

At an investor briefing hosted by JMMB prior to the meeting, Duncan said that the company's growth plan would include acquisitions and new business lines.

The investor briefing was a substitute for JMMB Group's annual general meeting, which was deemed unnecessary because the restructured group had not been in operation long enough to generate audited financial statements for shareholder review. A notice to that effect went out to shareholders and was posted on the stock market in July.

The new scheme of arrangement that created JMMB Group was approved by the court in 2014, however, the listing of the new parent company was finalised on April 13, 2015, a fortnight after its financial yearend.

Since 2007, JMMB has raised a near $7 billion from preference issues, and currently has four fixed rate stock trading on the Jamaica Stock Exchange, with coupons ranging from 7.25 per cent to 8.75 per cent. The company pays out monthly dividends of $29 million on those four stocks combined.

Some 915.395 million pref units with a value of $2.76 billion that were issued in 2011 will mature in January 2016. It's unclear whether the redemption will be paid for from a new market float or the group's $27 billion cash hoard. Neither Group CEO Keith Duncan nor his chief financial officer, Patrick Ellis, commented on when the first issue from the new six billion block of shares might be, only that it would be dictated by market conditions.

JMMB Group trades on the Jamaican, Trinidad & Tobago and Barbados stock exchanges. The company operates banking, insurance brokering and investment businesses in Jamaica, Dominican Republic and Trinidad.