Eppley value fund to raise $4.5b
Eppley Caribbean Property Fund Limited is aiming for $4.5 billion of fresh capital through an offer of shares, and cross-listing on the Jamaica Stock Exchange, JSE.
The fund already trades on the Barbados Stock Exchange in its home market.
The offer of 97.45 million shares at $46.18 per share opens on June 28 and closes July 12. NCB Capital Markets will act as the lead broker.
Eppley Caribbean, which is controlled by listed Jamaican company Eppley Limited, will use the proceeds of the share issue, net of expenses related to the offer, to purchase a portfolio of commercial properties in Jamaica and Barbados, repay bridge financing, and fund future purchases of commercial properties across the Caribbean.
The properties already earmarked for purchase were named as Prospective Class A Office in Barbados, Empire Shopping Centre in Jamaica, Angels Industrial Estate in Jamaica, 227 Marcus Garvey Drive in Jamaica, and Alamac Warehouse in Barbados.
The offer will increase the number of shares in Eppley Caribbean from 55 million to 153 million units. Its ownership post-offer is expected to be shared 58 per cent by the public, and 21.56 per cent for existing shareholders, while the largest holdings by institutional investors will include FirstCaribbean International Bank affiliates and clients at 6.85 per cent; Massy (Barbados) Limited at 3.2 per cent; Republic Bank Limited and its affiliates at 1.39 per cent; Airline Services at 1.29 per cent, RBC Trust Limited at 0.9 per cent, NCB Capital Markets (Barbados) Limited at 0.78 per cent.
Eppley acquired the property fund In May 2018 through Epply Fund Managers Limited. Eppley’s managing director, Nicholas Scott, is chairman of the fund.
Eppley Caribbean made total investment income for year ending September 2018 of BDS$612,500, but expenses of BDS$1.35 million resulted in a net loss of BDS$739,300 for the fund. The loss arose from a big revaluation write-down in the year.
The fund regained profitability in the six months ending March 2019, earning BDS$1.2 million of comprehensive income compared to BDS$780,700 a year earlier.
Eppley Caribbean Property Fund operates two funds - the Value Fund, which comprises six operational properties located in Barbados, and the Development Fund, which contains mostly undeveloped lands in Barbados, St Lucia, and St Vincent and the Grenadines.
The IPO only pertains to its value fund, whose assets span nearly 269,850 square feet, with an average occupancy of 90 per cent and an average net operating income yield of 7.8 per cent.
Eppley noted that net asset value of the value fund was BDS$0.71 per share as of March 31, which is equivalent to about J$50 at current exchange rates.