Wed | Nov 22, 2017

Jamaican Teas seals $57m deal with DBJ for KIW

Published:Wednesday | March 8, 2017 | 12:00 AM
Jamaican Teas CEO John Mahfood accepts a copy of the agreement for the sale of the Government's shareholding in KIW International Limited from Accountant General Carlene Murdock, after the signing ceremony on Friday, March 3, 2017, at the offices of the Development Bank of Jamaica. DBJ Managing Director Milverton Reynolds is at right.

 

Jamaican Teas signed off on its acquisition of KIW International Limited from the Jamaican Government on March 3, and has up to one month to finalise payment.

Through Development Bank of Jamaica, the KIW stake - comprising 42.6 per cent ordinary shares and 100 per cent of the preference shares - was sold for $57 million. Jamaican Teas paid down $10 million at signing and is expected to pay the rest by early April.

"This was our first transaction of this nature that was done with the Government, through the DBJ, and we found the persons that we dealt with very professional and the process transparent," said Jamaican Teas CEO John Mahfood in a joint press release with DBJ.

Jamaican Teas had previously indicated that it was selected the preferred bidder for KIW in market filings on the Jamaica Stock Exchange.

KIW International, formerly Kingston Industrial Works Ltd, was formed in 1908 to provide industrial repair services to the sugar estates. Its main income is generated from rental of factory and warehouse space, said DBJ.

KIW has over 2,000 shareholders. The Jamaican Government in August 1978 acquired 6.8 million ordinary shares or 42.6 per cent of the company as well as 14 million cumulative redeemable preference shares, DBJ said.

DBJ Managing Director Milverton Reynolds hailed the beverage company "for taking a bold step that would allow the company to expand, leading to them export more and hire additional staff".

"We, at the DBJ, are very pleased to see that the members of the private sector are seeing the enormous benefits and potential that are available when they invest in Government-owned entities that can add value to their holdings," Reynolds said.