FosRich to raise fresh capital, aiming for share offer by August
Published:Friday | April 22, 2022 | 12:07 AM
Electrical products distributor and pipe manufacturer FosRich hopes to approach the market by August for a fresh round of equity funding.
Its board will decide next week on whether to do an additional public offering of shares, APO, or a rights issue. The latter would confine the offer to a smaller set of stock market investors, that is, mainly those already owning stock in the company.
Shareholders will decide how the company proceeds at the next annual general meeting, following the board’s expected April 28 decision. They will vote on a stock split of both the authorised and issued shares at the annual meeting, which is anticipated to happen around mid-year.
“If all goes well, we are hoping for June or so,” said FosRich CEO Cecil Foster regarding the date for the vote.
“We will then have another wait on the processes which would take us into July or August,” he told the Financial Gleaner.
FosRich Company Limited, which is now a $2-billion business by revenue, went public in 2017 and listed on the junior market of the Jamaica Stock Exchange. Its market value as of Thursday was $13.7 billion or $27.28 per share.
The share capital for junior companies listing on the market is capped at $500 million.
Foster is not saying how much FosRich wants to raise but noted that the company has no intention of migrating from the junior to the main market at this time with the APO.
“It wouldn’t make good business sense right now, because we can access funds through bonds and so on. We don’t have to do that right now but rather, stay there and incubate ourselves further,” he said.
Were FosRich to migrate to the main market, it would be giving up the remaining five years of corporate tax waivers that it is eligible for beyond this year as a junior company. Two companies have migrated since the junior market’s founding, namely Key Insurance Company and Eppley Limited, for different reasons.