Steven Jackson, Business Reporter
Securities dealer NCB Capital Markets Limited will enter the Trinidad market through its acquisition of AIC Finance, which holds some US$3.7 million in total equity, according to the latest available financials.
The takeover was disclosed on the stock exchange on Monday by NCBCM parent, the National Commercial Bank Jamaica (NCB).
Both NCB and AIC Finance are ultimately owned by investor Michael Lee-Chin.
AIC Finance, a relatively small institution, provides one of the few, "if not the only", opportunity to expand in Trinidad & Tobago without significant upfront expenditure, said Steven Gooden, deputy CEO of NCB Capital Markets, in response to Wednesday Business queries.
"As such, we view this acquisition as a good starting point," he said, adding that the acquisition affords NCB Capital Markets an opportunity to further diversify revenues.
"Trinidad and Tobago is the strongest economy in the English-speaking Caribbean and provides access to markets in the Eastern Caribbean due to proximity. As such, Trinidad is a good place to start our regional expansion," he said.
NCB revealed in a Jamaica Stock Exchange filing that its board approved the acquisition of AIC Finance, which is a licensed financial institution in Trinidad & Tobago.
price under consideration
Gooden declined to reveal the purchase price under consideration but stated that the company holds TT$130 million (US$20 million) in assets.
"We are not in a position to disclose the acquisition price at this time. However, I can confirm that the purchase consideration is small relative to our shareholder's equity, and would be done at a discount to AIC Finance's book value," he said.
Gooden stated that in light of the related parties, the acquisition was done with an independent valuator.
"All transactions with related parties are done at arm's length. We commissioned an independent valuation which came out higher than the purchase consideration," he said.
AIC Financial products include mutual funds, stock brokerage, trade finance, merchant banking, deposits, fixed income securities and foreign exchange.
NCB Capital Markets is a subsidiary of the publicly traded NCB, Jamaica's largest banking group, which is owned 62 per cent by Lee-Chin.
AIC Finance is a subsidiary of Portland Holdings Inc, a Canada-based privately held investment company founded and chaired by Lee-Chin.
AIC Finance latest financials dated September 2010 states that it made a TT$4.3 million loss compared with a much larger loss of TT$46.8 million a year earlier.
Despite the loss, the company grew its cash to TT$40 million and held total equity of TT$23.6 million.
"The transaction is pending regulatory approval in both Trinidad and Jamaica. Once these approvals are received, we will be in a position to complete the transaction shortly thereafter," Gooden said.