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Eppley extends IPO to cash in on $45b of bond payments

Published:Wednesday | July 17, 2019 | 12:19 AMNeville Graham/Business Reporter
Nicholas Scott, chairman of Eppley Caribbean Property Fund Limited and managing director of Eppley Limited.
Nicholas Scott, chairman of Eppley Caribbean Property Fund Limited and managing director of Eppley Limited.

The initial public offering of shares in the Eppley Caribbean Property Fund Limited SCC-Value Fund has been extended by two weeks, but the fundraising target is so far unchanged at $4.5 billion.

Eppley Caribbean Chairman Nicholas Scott says the company is to give institutional investors more time to come on board, based on the advice of lead arranger of the share float, NCB Capital Markets.

The IPO deadline has been moved from July 12 to July 31. The offer currently remains at 97.448 million units at $46.18 per share.

“Given that the offer is a relatively large transaction, we felt that it was prudent to allow a number of institutional investors to complete their approval process and to take account of the significant liquidity event which occurred on July 12,” Scott said on Monday.

The ‘significant liquidity event’ to which he referred was the $45 billion that flowed into the market from maturing Government of Jamaica bonds and interest payments. Finance industry sources say the holders of those funds are looking for investment opportunities.

As to why NCB Capital did not factor the bond payments into the timing of the IPO, CEO Steven Gooden, who was travelling overseas, promised to respond.

Meantime, Scott says Eppley has already received enough share applications to hit its minimum target from the IPO, which was set at $650 million in the prospectus.

“We can confirm that we have already raised the minimum amount required to list on the JSE as per our prospectus. We and our arrangers at NCB Capital Markets will make additional disclosures to the market at closing,” he said.

The company also has the option of upsizing its offer by another $2 billion to $6.5 billion, by offering an additional 43.31 million shares to the market. Exercising that option would increase the offer to 140.758 million shares.

As to whether Eppley Caribbean will use the option, Scott, after consulting with NCBCap and company lawyers, said he was “not permitted to provide any forecast or forward-looking statement.”

Eppley Caribbean is a Barbados-based fund that was acquired by Jamaican company Eppley Limited in May 2018. The company was then known as Fortress Caribbean, but was later rebranded under the Eppley name.