Mayberry to list subsidiary
Brokerage firm Mayberry Investments Limited will list its subsidiary on the Jamaica Stock Exchange, JSE, before the end of March, which could see it raising more than a $1 billion of equity capital.
In preparation for the listing, wholly owned subsidiary Mayberry West Indies Limited, MWIL, is being renamed Mayberry Jamaican Equities Limited, or MJEL.
Mayberry CEO Gary Peart told the Financial Gleaner that the float would allow investors to participate in owning a company that itself owns equity in several listed companies.
Based on MJEL's book value at nearly $7 billion, and stock market requirement that at least 20 per cent of a company must be offered to investors in an initial public offering, the share float is likely to be valued at $1.4 billion. However, Peart declined to confirm or deny that figure, due to regulatory concerns.
Mayberry Investments previously explained that the true value of the group lies in the share portfolio within its balance sheet, which hovers at some $7 billion. The financials of the group, however, focuses more on client services and fees and less on the movement of the portfolio, and as it mostly falls outside of the profit and loss and into comprehensive income movement.
Going forward, Mayberry's accounts will continue focusing on brokerage and client services, while MJEL accounts will focus on the shares portfolio. Peart indicated, however, that the subsidiary was not demerging from the parent.
Mayberry Investments is a financial advisory firm, licensed securities dealer, and a member of the JSE. The company was established in July 1985 by the late Maurice Berry, a former deputy governor of the Bank of Jamaica. Mayberry has over $18 billion in funds under management on behalf of 20,000 clients.
MJEL book value
The company has been listed on the JSE for more than a decade, since April 2005 when it raised roughly $1.2 billion.
"You would value MJEL based on the book value," said Peart. "The balance sheet is where my value is. So I am listing both companies, so you can now see it and value it accordingly," the Mayberry CEO said.
The listing of MJEL means that investors can opt for that stock, instead of buying individual stocks or a unit trust portfolio, Peart reasoned.
"Some people have an equity fund that they buy into, but instead, you can just buy shares in MJEL," he said.
At Mayberry Investments' last annual general meeting, stockholders authorised the board to reorganise MWIL, so as to increase profitability and value for shareholders.
Then on December 29, Mayberry's board voted to rename MWIL and authorise the listing of the stock by the end of the first quarter of 2018. The directors also approved a non-cash dividend - a dividend in specie - of 10 per cent of the net book value of MWIL.
This dividend will be effected by the company transferring shares in MWIL to Mayberry shareholders, stated a market filing on the JSE.
"Normally, a company can offer a dividend as cash, we are basically dividending shares in MWIL on the value as at November 30 of almost $700 million," Peart told the Financial Gleaner.
The JSE filing estimates the value of the dividend at $688 million.