Tue | Oct 19, 2021

Barita takes 20% stake in Derrimon

Published:Sunday | February 28, 2021 | 12:09 AM

Barita Investments Limited announced that it now owns 20 per cent of Derrimon Trading Company Limited, a stake valued at $2.3 billion at present market value.

Barita now holds the second largest position in Derrimon, behind founder Derrick Cotterell. The distribution company, which trades under the symbol ‘DTL’ on the junior arm of the Jamaica Stock Exchange, is capitalised at $11.6 billion.

At one-fifth ownership, Barita holds over 906 million of the 4.53 billion DTL shares in issue. The investment company would have acquired a good portion of those holdings on the open market. The opportunity to buy DTL shares presented itself in January when Mayberry Jamaican Equities decided to sell its holdings, but it’s unclear how much, if any, of those shares Barita might have acquired.

Barita was otherwise assigned 378.4 million shares under the additional public offering of shares, or APO, that Derrimon recently executed. As lead broker for the offer, which closed January 26, it had been willing to underwrite the APO up to a value of $3.5 billion, but didn’t have to as the offer was oversubscribed.

The size of Barita’s holdings in Derrimon classifies the distribution company as an associate of the investment firm.

“We welcome Barita,” Cotterell said on Friday. “We like their decisiveness. Their energy matches ours and we think we are compatible,” he told the Financial Gleaner.

Derrimon previously utilised Mayberry Investments Limited as financial adviser, but chose Barita for its second run at the market. Mayberry brokered the distribution company’s initial public offering, or IPO, back in 2013.

Mayberry Jamaican Equities, which is a subsidiary of Mayberry Investments, held 16 per cent of Derrimon going into the APO, and would have ended up with around 10 per cent on a diluted basis after the offer. Mayberry, however, decided to sell its Derrimon holdings to willing takers while the APO was on the market.

Barita’s holdings now surpass the stake held by Mayberry. Cotterell held 40 per cent of the DTL shares prior to the APO, which was expected to dilute to 26.3 per cent following the offer, according to the prospectus.

Barita said it would respond to requests for more clarity on the investment in Derrimon, which was not forthcoming up to press time.

There is no word yet on whether the investment firm will gain representation on Derrimon’s board. “That’s a discussion for the future,” Cotterell said.