Wed | Jan 16, 2019

JMMB to raise $3b from preference share offer

Published:Friday | February 23, 2018 | 12:00 AM

JMMB Group Limited plans to raise more than J$3.2 billion in four simultaneous preference share offers that open later this month.

The proceeds of the issue will be used to support the group's continued expansion both locally and regionally, and to refinance existing debt, the prospectus said.

In the event of full take-up over the February 28 to March 7 subscription period, the offer would raise $1.9 billion at an interest rate of 7.25 per cent; $100 million at 7.0 per cent, US$9 million at 5.75 per cent, and US$1 million at 5.5 per cent.

The JMD shares are shares are priced at $2 each, and the foreign currency shares at US$2 each.

"The offer is thus being primarily conducted to increase the capital base of the group in order to fund expansion activities locally and regionally which are consistent with the group's regional and business line diversification strategy," said JMMB. It plans to list the shares on the Jamaica Stock Exchange.

In its third quarter ending December, JMMB Group made a profit of $909 million on net interest income of $1.9 billion. Profit climbed 39 per cent in the period, year-on-year.

"In the third quarter, Jamaica's focus remained on operationalising its commercial bank and driving revenue per client through cross-selling efforts," said CEO Keith Duncan in comments accompanying the prospectus.

"The Dominican Republic portfolio increased its contribution to overall profitability of the group with improvements in operating revenue from the banking and mutual fund business lines. Though at early stages in their life cycle, the attendant synergies gained from the existing cost structure will result in increased net operating revenue in the near term from these entities," he said

Duncan, however, described operations in Trinidad & Tobago as challenging.

The JMMB Group serves approximately 270,000 clients in Jamaica, Trinidad & Tobago and the Dominican Republic combined. It provides investments, banking, remittances and insurance brokering services.