Sat | Dec 16, 2017

New US$40m bond to finance indirect acquisition of SVL stake

Published:Friday | October 6, 2017 | 12:00 AMSteven Jackson
Gary Peart, CEO of Mayberry Investments Limited.

Zodiac International Investments & Holdings Limited of Trinidad & Tobago is issuing a US$40-million bond in Jamaica to finance its takeover of Intralot Caribbean Ventures Limited.

The bond, for which Mayberry Investments Limited is the lead arranger, will be issued in three tranches from October to December.

The first placement is for US$6 million at 6.5 per cent interest over 13 months; the next will be for US$14 million at seven per cent for 18 months; and the final tranches is for US$20 million at 8.0 per cent to mature in 30 months, according to the indicative term sheet obtained by the Financial Gleaner.

Maberry CEO Gary Peart said the bond would be offered to accredited Jamaican and Caribbean investors.

Zodiac, which is based in Trinidad & Tobago, is acquiring 50.05 per cent of Intralot Caribbean from its majority partner Intralot SA of Greece to take full ownership of the company.

The deal will give Zodiac a bigger hold on the Jamaican operation of Supreme Ventures Limited, SVL. As a partner in Intralot Caribbean, the Trinidad firm held 24.95 per cent of SVL indirectly. Once the takeover is finalised, it will hold 49.9 per cent of the Jamaican lottery company. However, part of the deal will see Zodiac offering up some of its SVL shares to underwriters of the notes. The Intralot Caribbean acquisition is scheduled to close on December 31.

"In this transaction the company is proposing to issue the notes in order to acquire sufficient funds to purchase all of the outstanding shares of ICVL that it does not currently own from Intralot St Lucia Limited," the term sheet stated.

JMMB Securities Limited will be the lead underwriter of the bond, among other unnamed entities. These underwriters will have to the option to convert their notes into up to US$10 million of Supreme Ventures stock units, the Financial Gleaner was advised.

The underwriters' will have to option to convert the debt to shares in Supreme Ventures at a price of around $9.50 to $9.75 per share. Zodiac would use the proceeds of the sale of Supreme Ventures shares to pay certain expenses relating to the financing and acquisition transactions, in an amount not exceeding US$10.75 million; and to finance principal and interest due to noteholders in the event of an early repayment, said the term sheet.

Zodiac has a history with Supreme Ventures beyond its indirect ownership. In December 2014, Supreme Ventures's board of directors approved a funding facility equivalent of US$5 million to ICE Jamaica Limited, a company that its subsidiary Prime Sports (Jamaica) Limited is partnering with to develop VLT 'route' gaming infrastructure.

The arrangement provided that Zodiac serves as principal debtor by means of a charge over its shareholding in Intralot, SVL said at the time.

steven.jackson@gleanerjm.com