Proven aiming for $4b from share issue
Proven Investments Limited, PIL, says it plans to raise $4 billion (US$30 million) in its additional public offer of shares in the company, or APO, funds it will use to acquire new assets and finance ongoing projects.
It’s the second company in months to issue additional shares, behind JMMB Group, which did an APO last October in Jamaica and Trinidad.
Proven wants to capitalise on undervalued assets that offer significant upside over time.
“We have deals in the pipeline, properties we bought, and financial entities ready for acquisition. The deals are sealed up,” said Proven CEO Christopher Williams.
He declined to give specific details about the acquisition targets, but Proven’s strategy is to acquire businesses that generate high profit on its capital or return on equity (ROE).
Williams reminded the Financial Gleaner about the group’s current ROE at 46 per cent up to September, but that jumped due to the partial sale of its stake in microlending firm Access Financial Services.
“A big part of private equity is exiting. You have to time your exit just as you time your entry,” Williams said.
Proven closed its March 2019 financial year with an ROE of 11 per cent, arising from profit of US$10.2 million on total equity of US$92 million.
The company’s current real estate projects include a residential development in Mandeville; residential apartments at Braemar in New Kingston; and its Cesar residential development at Millsborough Avenue in St Andrew. There are also new opportunities in Ocho Rios, St Ann and a joint venture with the Missionary Church Association of Jamaica to do a residential development at Grove Park in Kingston, comprised primarily of studio apartments.
“They own the land, PIL provides the capital and we both share the profit,” he said.
Williams said Proven’s founding shareholders are likely to participate in the APO in order to maintain their share weight and avoid a dilution of their holdings.
“While that’s a decision for each individual shareholder, history has demonstrated that we have maintained and grown our percentage holding as a group over the last 10 years. I cannot speak for each shareholder and their families, but our commitment to the company is solid. The founders are not going anywhere,” Williams said.
Proven Investments Limited is managed by Proven Management Limited. Peter Bunting, Mark Golding, Garry Sinclair, Hugh Hart and Williams have strong associations with the company, with Bunting holding the largest block of shares at 30 million units or 4.8 per cent.
In November, Barita Investments, a firm owned by rival private equity outfit Cornerstone Investment Holdings Limited, acquired five per cent of Proven Investments. Williams said the founding shareholders remained in full control of the company.
“Myself, Bunting, Golding and Sinclair still hold significant shares and are still buying. The founders of Proven continue to be the majority shareholders of the group,” he said. “But we are happy with the endorsement of support by Cornerstone.”
Proven Investments is hoping to receive all regulatory approvals before next month in order to release a full prospectus for the APO.
The company investments include Proven Wealth Limited, Boslil Bank Limited, International Financial Planning (Cayman) Limited; Access Financial Services Limited, Dream Entertainment Limited and JMMB Group Limited.
“We are excited about the short and medium opportunities and we expect that our core earnings will grow as a result of the deployment of these funds. We are deploying into earning assets, and that will result in an improvement in our overall performance,” Williams said.