Mayberry's share offer sells off within a few hours

Senior staff reporter

Wednesday, July 11, 2018

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Mayberry Investments Limited (MIL) closed its offer for sale of over 120 million shares in its newly renamed subsidiary Mayberry Jamaican Equities Limited (MJE), just four hours after it went on sale via the Jamaica Stock Exchange(JSE) on Monday.

MIL announced the closure of sale of the 120,114,929 MJE ordinary shares at the price of $7.56 per share — which was made subject to a prospectus the company released on Friday — at about 1 pm Monday after the offer was fully taken up. The application list was opened at 9 am.

The shares offered for sale by MIL constituted 10 percent of the issued share capital of MJE, and raised some $908 million for the subsidiary.

MIL will continue to hold 80 per cent of the issued share capital of the company, and another 10 per cent is currently held by MIL stockholders following the distribution of a dividend in specie made to them in February.

MIL also stated that it would be advising applicants of the preliminary basis of allotment of the shares by today, Wednesday, July 11, in accordance with the Main Market rules of the Jamaica Stock Exchange which requires that a minimum of 20 per cent of a listed company's shares must be issued to the public.

The IPO sale was the latest episode in MIL efforts to meet the 2017 demand of its shareholders, for the company to seek to enhance the share holding value of the stock. Following the request, MIL decided to list its St Lucian subsidiary, Mayberry West Indies Ltd, on the local stock exchange under a new name, Mayberry Jamaican Equities Ltd (MJE).

Based on that decision, MJE paid out stock dividends in cash to the shareholders starting with a $270-million pay out, considered one of the highest in the history of the company, last year. In February MIL paid a stock dividend valued at $688 million at the time.

MIL said that since February 28, the value of the dividend increased significantly, due primarily to appreciation in the value of the underlying business.

Total assets grew to $12.44 billion for the second quarter 2018, compared to $7.28 billion for the comparative quarter 2017. This represents a $5.17-billion increase or 71 per cent in its in its asset base, due mainly to increased value in the quoted equities, Lasco Financial Services Ltd, Caribbean Producers (Jamaica) Ltd, Supreme Ventures Ltd, Caribbean Cement Company Ltd, Jamaica Broilers Group Ltd, and JMMB Group Ltd.

Total Liabilities increased over the prior period by $900.95 million to $1.06 billion (557.9 per cent). The assets were funded in part by amounts owed to the parent company, which increased by $621.5 million. In addition, accounts payables moved from $134.8 million in June 2017 to $376.2 million at the end of June 2018, an increase of 179 per cent.

MIL CEO Gary Peart noted that the company currently holds stock in more than 30 companies listed on the Main and Junior Markets of the Jamaica Stock Exchange.

In terms of the environment, for the second quarter of 2018 the JSE Main Market Index grew by 11,203 points or 3.8 per cent, up from 294,533 points when compared to first quarter 2018. The JSE Junior Market grew by 79 points or 2.6 per cent to end June 2018 at 3,037 points. Both markets continue to reflect an increase in active participants.

Peart has noted that MJE'S capital base remained in good standing, resulting from higher profitability, with a movement in retained earnings from $3.71 billion to $5.21 billion, and fair value reserves of $4.6 billion up from $1.9 billion.

He also noted that all the MIL shareholders, as of February 28, hold shares in MJE, giving the subsidiary an immediate shareholders' base of approximately 5,500 shareholders.

There is also a suggestion that with the inclusion of the IPO investors MIL could lead to an expansion, based on the increase in shareholders.

At the end of the IPO some 240 million shares will be available to be traded, so investors will now have to decide whether they wish to sell and get back their cash, hold and watch, or buy more shares.

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