Olympian Usain Bolt will increase his share-holding in entertainment ventures, including Fiction nightclub and Tracks & Records restaurant, to 10 per cent once the KLE Group goes public this month.
Bolt, via his Sherwood Holding Limited, will increase shareholding from 9.25 per cent to 10 per cent, totalling 10 million shares worth J$37 million, according to the Kingston Live Entertainment (KLE) prospectus issued this week.
The Gary Matalon-led KLE plans to raise J$94.67 million in the initial public offering and list on the junior market.
It will make Bolt, whose annual earnings were last estimated by Forbes at US$20m, the fourth-largest shareholder in KLE.
One-third of Bolt's shares will be offered at a discount price of J$2.77 compared with the J$3.70 price offered to the public, according to the prospectus.
The discount is linked to an amended sub-licence deal in June in which Bolt "granted the KLE group the right to use certain intellectual property relating to Bolt for the purposes of its business associated with Usain Bolt's Tracks & Records".
Other directors on the surface reduced their shareholding but also formed separate entities, including management companies to fortify their standing.
Matalon will remain the largest shareholder following the listing, down from 18.7 per cent to 13.69 per cent. However, the shareholding in his connected companies will increase, including Neustone Ltd from 0.68 per cent to one per cent and Construction Systems Ltd from nil to 0.8 per cent.
The stated 'key partner' block of shares at 1.8 per cent does not disclose the allotments.
KLE Group recorded a J$7.1 million loss over six months ending June 2012 on revenues of $139.6 million. KLE's revenue doubled year-on-year based on the addition of Tracks & Records to the group.
PanCaribbean Financial Services, the lead broker for the deal, said that prior to November 2011, KLE Group contained only Fiction nightclub. Subsequent to that date, the financials of Tracks & Records (formerly held by another associated company) were amalgamated into the KLE Group. It resulted in the 2011 annual results incorporating 12 months of Fiction revenues but only one month of Tracks & Records. Going forward, however, the KLE Group will report the financials of both ventures.
KLE plans to raise J$94.6 million from its initial public offer of 27 million shares, 13 million of which will be offered to the public at J$3.70, which is a future price-to-earning ratio of six to seven times, according to PanCaribbean.
KLE will pursue additional ventures, including a planned gaming lounge called Secrets, in conjunction with gaming giant Supreme Ventures Limited. Its other ventures will include a 6,000-square-foot club in Portmore, St Catherine, called Famous; and a 45-room villa complex, called Bessa, on eight acres of beachfront land on the north coast, in conjunction with insurance giant Sagicor Life Jamaica. The villa project is a US$7.6-million investment.