Sagicor to close US$310m deal with Playa at month end
The sale of Sagicor Group Jamaica’s hotel assets to Playa is scheduled to close on Thursday, May 31, and with it the handover of the Jewel Dunn’s River, Jewel Runaway Bay, Jewel Paradise Cove, Jewel Grande and Hilton Rose Hall resorts.
“After all costs, we expect a gain on the assets and we will book them in various compartments and funds where they reside,” Sagicor Group President & CEO Christopher Zacca told the Financial Gleaner at the company’s annual general meeting on Friday.
“Right now the value of the deal is US$310 million, with US$210 million in shares and US$100 million cash or about J$40 billion and at that price we expect a gain,” said Zacca.
The deal as previously disclosed involves Sagicor handing over its hotel assets to Playa Hotels & Resorts in exchange for US$100 million in cash and a roughly 14 per cent stake in Playa’s shareholding. Plays’s shares closed at US$10.49 on the Nasdaq on Friday.
The net value of the deal will be determined at closure of the transaction on Thursday, Zacca said.
Sagicor will keep its commercial real estate, lands along with the Doubletree hotel in Florida, United States. The Florida hotel and other real estate assets are held by Sagicor Real Estate X Fund in which Sagicor Group has controlling interest. The composition of X Fund’s financials following the handover of the Jamaican hotels, in which it held ownership, will be discussed further at its annual general meeting scheduled for June 12.
Zacca also reaffirmed that within three years Playa will invest US$200 million to add 760 rooms to the 1,320 rooms being acquired from Sagicor.
Shareholders approve new age limit for directors
Also at the Sagicor AGM, shareholders approved two resolutions: deletion of Article 79 which required directors to own shares; and Article 97(f) was amended to increase the age limit of directors from 65 to 72 years.
The adjustments bring several directors back into compliance with the rules. Former CEO and now Chairman Richard Byles, at 67, was two years above the age limit for a director, while three board members do not own shares in the company.
“The way the articles are currently written, Mr Peter Melhado, Mr Peter Clarke and Mr Stephen McNamara are in violation, although they have served this company long and faithfully. All we are asking is for the articles to say that they can hold nil shares and continue the service they are giving,” said Byles, who then acknowledged that he himself was in violation of the age limit.
He said the new age limit was guided by a survey, which found that progressive companies on the Jamaica Stock Exchange had moved their age limit of directors to 72.
“I certainly at 67 feel I have something to contribute to Sagicor, although I am beyond the 65 age limit, and there are many on our board who continue to contribute massively also and are above 65,” he said.