AJAS aiming for year-end IPO
Aircraft cargo and handler provider AJAS is going public and plans to list on the junior market of the Jamaica Stock Exchange, JSE, early in the new year.
The owners hope to open the initial public offering of shares to investors before the year ends. The size of the equity raise was not disclosed, but junior market IPOs must fall within a band of $50 to $500 million.
AJAS Limited manages 90 per cent of airline cargo and handling in the island. Large shareholder Howard Mitchell said that the company plans to raise funds in order to finance expansion, and raise its profile among persons outside the aviation industry.
“Management is seeking to strengthen its competitive position to ensure that AJAS remains relevant and positioned to meet the increasing demands of its customers,” Mitchell said.
The bulk of the shareholding belongs to the Mitchell family which includes Howard and two daughters, Erin Mitchell-Walton and Kirsten Mitchell. Other owners include Barnett Estates, Barry Byrne, Richard and Judith Harrison and Christopher Tufton.
The shares are held in Caricom Airlines Services Holding Limited which acquired AJAS in 2013 from the former Lascelles deMercado & Company Limited, now renamed J. Wray & Nephew Limited.
During that period, Lascelles was stripping itself of non-core sugar and rum assets arising from its acquisition by Italian company Campari Group.
AJAS plans to put as much as 45 per cent of the company on the market and said it would be a large raise. Mitchell avoided giving specifics as the prospectus has not yet been approved by regulator Financial Services Commission.
“We are not cashing out. It is a serious restructuring for the future to meet demands of the new aviation logistics,” Mitchell said.
Mitchell indicated that there’s a structural shift with increased investment required to keep pace with increased passenger and cargo volumes, fuelled by investments in airports. Additionally, airlines want to secure long-term cargo deals with single contractors for the region. And, while local competition includes companies like GCG Ground, there is also the potential of international logistics firms like Amazon seeking to enter the region.
Consequently, AJAS wants to explore new alliances and opportunities for expansion into overseas markets for the 2020 financial year.
Mitchell said that AJAS grew into the largest ground handling company in Jamaica, and now handles over 18 million kilograms of cargo annually and provides services to over 7,000 passenger flights, combined, for all the major airlines.
The company earns the bulk of its $1.5 billion in annual revenues in foreign currency.
In November 2013 after its acquisition by Caricom Airlines Services, AJAS said it became the first locally owned ground handling company to receive international ISAGO certification, and that it is the only ground handling company to be certified in Jamaica.
The roots of the company go back to year 1941 when Lascelles deMercado accepted an appointment to serve as airport handling agents and general sales agents for KLM’s first scheduled flight into Jamaica.