Thu | Sep 20, 2018

Sagicor becomes largest shareholder in 138SL

Published:Wednesday | January 25, 2017 | 12:00 AMTameka Gordon
Chairman of 138 Student Living Jamaica Limited, John Lee, is flanked by Company Secretary Tracey Campbell (left) and Deputy General Manager Rose Hamilton, at the company’s annual general meeting held at the Mona Visitors’ Lodge on Monday.

Sagicor Group Jamaica now controls the largest block of shares in 138 Student Living Jamaica (138SL), amounting to around 40 per cent of the real estate company in the business of developing student housing.

Chairman of 138SL, John Lee, made the disclosure at the company's annual general meeting on Monday.

Up to last September, K Limited, which is owned by Lee and his wife Marrynette Lee, held 40.3 per cent of 138SL, while three Sagicor, related entities held 30.33 per cent.

Market disclosures show a 30.734 million trade of 138SL shares on January 13. The stock traded at $4.50, valuing the transaction above $138 million. On January 16, a director sold 7.838 million units. Both trades amounted to around 9.3 per cent of the company.

Sagicor Group did not return calls for comment. Lee said the financial conglomerate's acquisition of the additional shares in his company was made with the endorsement of the University of the West Indies (UWI), with which 138 Student Living has two concession agreements to build and operate rooms for students.

"This clearly demonstrates Sagicor's confidence in this project, which is transforming the landscape of the UWI and student housing in the Caribbean," he told the meeting.

Student Living is developing 1,584 rooms for UWI, Mona, which it will own and operate for 30 years. Fewer than 600 units remain to be delivered.

Lee boasts that, economically, his operation could potentially outpace earnings from Blue Mountain coffee, a product for which Jamaica is famous.

"With those 1,500 rooms that we are doing, if we were to get 1,500 medical students coming to Jamaica, they would be paying US$30,000 per year - that is $30 million in foreign exchange coming in," he said. "It's larger than the Blue Mountain coffee industry."

During its financial year ended September 2016, the company completed another 576 rooms, marking a total of 1,008 rooms delivered so far under the concession agreement.


"The first two of the four blocks were delivered in August 2016 and are now fully occupied. The other two blocks were delivered in December 2016 and are now taking residents," Lee told shareholders.

Construction of another 394 rooms on the renovated Gerald Lalor flats, also started in December, to be delivered in July this year, he said.

"These are being delivered to appeal to a more expansive market segment," he said.

138 Student Living and its subsidiary, 138 Restoration, now operate the Leslie Robinson Hall, Gerald Lalor Flats and another newly built hall yet to be named.

The company posted annual revenue of $295 million in 2016 and profit of $26 million. Revenue in 2015 amounted to $12 million.

At the AGM, shareholders approved an amendment of the articles of incorporation so that "the allotment of shares for consideration other than cash" will be permissible.

The change will allow 138SL to satisfy debts for professional services with share transfers instead of cash to pay down its debt, Company Secretary Tracey Campbell told Gleaner Business.

"When we sat and conceptualised the project, the cash cost that it would have taken to get it off the ground was extremely high. Most financial institutions would not have endorsed it, so we had to come with other means of getting it off the ground," Lee said at the meeting.