By Dennise Williams, Staff ReporterJAMAICA UNIT Trust Services Limited (JUTSL) is now on the auction block.
Ads placed in the local media state that the company which manages the Jamaica Investment (Income & Growth) Fund, the Jamaica Investment (Capital Growth) Fund and the Jamaica Investment (Giltedge) Fund is open for offers for the period of February 23 to March 15. Offers will be revealed on March 15.
Anton Thompson, managing director of JUTSL confirmed that the firm was for sale but declined to give any further details.
The successful bidder will be the holder of 92.7 per cent of the shares in the firm. The shareholding is being offered for sale by its owner, the Government of Jamaica (GoJ) through the Financial Institutions Services Limited (FIS).
The management company boasts on its web site that it has authorised capital of $310 million and issued and fully paid up share capital of $305 million.
The company web site states that the information on its web site is 'fairly up to date.' The JUTSL web site also states that the company manages unit trust funds with assets in excess of $1.3 billion.
INTEREST SHOWN
"Over the years, interest was shown by Grace, Kennedy Jamaica National, Victoria Mutual Society, National Commercial Bank, Life of Jamaica, Capital & Credit Merchant Bank and Jamaica Money Market Brokers," according to one well-placed financial sector source. Speaking on condition of anonymity, he said, "It was quite a long list of interested parties, but the question is if they are still interested now."
The staff at the FIS declined to comment on the number of tenders received, but one company that has acknowledged its interest is Barita Unit Trust. An executive at that firm stated that, "everything is subject to price. If the price is right, why shouldn't we buy the company? In fact, I think that any organisation trying to get a foothold into the unit trust market, would be a bidder."
Wednesday Business was told that the unit trust management firm is not only attractive because of the funds under management, but because its license offers purchasers a "privilege". While many financial institutions have applied for unit trust licenses, Government hasn't issued any new licenses in about 10 years."
Currently, there are just three other unit trusts in Jamaica, comprising Barita Unit Trust, DB&G Unit Trust and Sigma Unit Trust.
Jamaica Unit Trust began operations in May 1970 one year after the Jamaica Stock Exchange was established. but it fell victim to the financial sector fallout of the 1990's and was recapitalised the Financial Sector Adjustment Company.
The exclusivity of the unit trust license gives it an added value, the financial sector source said. But bidders need to consider the value of the management company itself, as the funds under management belong to the unit trust investors. Additionally, the actual assets held by the firm and the future earnings of the company need to be added to the equation.
"Back in 1999, when Eagle Unit Trust was up for sale, the shareholder's equity was $80 million and Dehring Bunting & Golding paid $115 million for Eagle Unit Trust," the source said. "You can use that premium paid as a basis for determining price."
