VM Wealth seeks to raise $690m from IPO
VM Investments Limited (VMIL) is aiming to raise $690 million in an initial public offering in an effort to list on the main market of the Jamaica Stock Exchange (JSE).
The IPO opens on December 11 and closes on December 18.
The company plans to use the proceeds for working capital and to take advantage of new business opportunities. VMIL plans to list the shares at $2.45 and invite the public to purchase up to 300,005,000 ordinary shares.
"These shares represent 3,005,000 opportunities to be part of our mission to do more than create wealth," according to the prospectus. "Investors in VMIL will play a vital role in helping local companies realise their growth potential. You become a positive economic catalyst for Jamaica and, in so doing, you also gain from this growth as it bolsters the value of the VMIL stock in your portfolio," it added.
Victoria Mutual Building Society (VMBS) holds 100 per cent of the 1.2 billion units. After the IPO shares will expand to 1.5 billion with VMBS holding 80 per cent and the public holding the remaining 20 per cent. Five of that 20 per cent will be offered to the general public, another five per cent to employees, and 10 per cent to VMBS group members.
VMIL has been a member of the JSE since 1994 operating as a licensed securities dealer. Since 2011, VM Wealth has diversified its revenue streams away from fixed income and securities trading to becoming active in the asset management and capital market space, with a range of products and services. This has resulted in VMIL now earning approximately 70 per cent of its revenue from non-interest income sources.
The company earned $273 million in net profit on revenues of $558 million for the nine-months ending September 2017. That equated to a 14 per cent dip in net profit year on year.
VMIL balance sheet totals $16.3 billion with total equity standing at $1.62 billion up from $1.36 billion a year earlier.
The company’s return on equity and return on assets improved from 14.3 per cent and 1.29 per cent in 2012 to 19.64 per cent and 1.95 per cent in 2016 respectively over the five year period. VMIL said the return on equity had a low of 14.32 per cent in 2012 and a high of 22.80 per cent in 2015.
"As part of the VM group’s strategic goal of being a strong integrated financial group, in 2017 the recapitalisation of VMIL was initiated as a vehicle to facilitate corporate lending and investing to support well run Jamaican businesses," stated the prospectus.
"To date, VMIL has successfully raised J$500 million of debt by way of a private placement," it said. "We are now embarking on another round of fund raising through this offer to widen revenue streams and tap into existing opportunities in the corporate lending landscape. VMIL will offer a range of products including margin loans, insurance premium financing, lease financing, underwriting services and secured corporate loans, managed by the financial expertise of the VM Wealth team," added the prospectus.