Gwest seeks to raise $425m from IPO - Offer opens December 7
Gwest Corporation plans to raise nearly $425 million in its initial public offering (IPO) this month in order to expand its business.
The company plans to sell some 35 per cent of the company in the listing to the public, led by broker JMMB Securities. The offer opens on December 7 with 169.69 million shares floating at $2.50 each.
The company's founders include medical and business professionals led by chairman and chief executive officer Dr Konrad Kirlew, Wayne Gentles, Dr Ladi Doonquah, Elva Williams-Richards, Dennis Samuels and Denise Samuels. The company operates five medical businesses branded as Gwest Medical, which offers specialised services and is based at the Fairview Shopping Centre in Montego Bay.
The company is in the various stages of building additional capacity. However, finance costs related to building out are hurting its profitability and the IPO would go towards reducing such costs going forward, according to the prospectus posted on the Jamaica Stock Exchange website
Additionally, the company wants to build out and outfit the Gwest Outpatient Surgery Centre, which require a $180-million investment, and the Gwest Inpatient Unit at $90 million, according to the prospectus for the offering. Both developments are expected to be completed in September 2018. Previous stages included the construction of the Gwest Urgent Care and Gwest Laboratory which opened last month.
At present, a number of medical professionals and service operators lease or have purchased space in the Gwest Centre. Facilities are available for visiting physicians from elsewhere in Jamaica, the Caribbean and North America. The company also provides medical services to both the local and international markets, and plans to also market itself as health tourism centre.
The company's audited financials show that it made $1 billion in revenues and $180.6 million in net profit for the year ending March 2017 versus a loss in the previous year at $30 million. Unaudited six-month results show a net loss of $29 million up to September 2017 versus a net loss of $20 million a year earlier. Total assets as at March 31, 2017 stood at $1.44 billion with total equity of $315 million. Up to September 2017 group equity stood at $ 286.5 million.
Construction of the Gwest Centre commenced in June 2014 and practical completion was achieved in January 2016. The project was financed by a construction loan of $860 million from National Commercial Bank Jamaica Limited and shareholders' loans amounting to $467 million at the end of financial year 2016.
The total issued shares currently at 324.8 million units would move to 484.8 million units if the IPO is successful.