Editorial

Right and proper that Jamaicans should share in Wigton's windfall

Friday, April 12, 2019

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The Government's declaration that the Wigton Windfarm initial public offer (IPO) is being structured to ensure the widest possible distribution of shares to Jamaicans is commendable.

Prime Minister Andrew Holness has told us that 2.2 billion of the 11 billion shares will be reserved for public sector workers, while Finance Minister Dr Nigel Clarke has explained that reserved share applicants will be allocated on a “bottom-up” basis in tranches of 10,000 shares until those are fully allocated. Also, the general public will then be allocated shares on a similar “bottom-up” basis in tranches of 10,000.

“A bottom-up distribution means that the person who puts in the application last, if it is a micro application or small application, will get filled over the large investor who is first,” Minister Clarke said at the launch of the IPO on Tuesday.

Basically, what that means is that small investors will get preferential treatment over large investors, he said, adding: “It is important to the Government that every single Jamaican has an opportunity to participate in this significant IPO, the first of its kind in 30 years, offering an energy investment opportunity to Jamaicans.”

Prime Minister Holness further stated: “This is the best way of achieving the goal of socialisation of wealth.”

The IPO, as already reported, is seeking to raise $5.5 billion for a company that, from all accounts, is likely to continue doing well. Readers will recall that since becoming operational in 2004 with the commissioning of a 20.7 megawatt-generating plant — Wigton I — the company has reduced Jamaica's oil consumption by close to 406,000 barrels, which has saved the country almost $3 billion.

Outside of its financials showing that Wigton has improved net profit by $639 million to total $826 million for its 2018 financial year over 2017, potential investors should be impressed with the fact that the business has expanded with the development of Wigton II in 2010, which generates 18 megawatts of energy, and Wigton III, a 24-megawatt facility that was officially commissioned into service in June 2016.

Of note is the fact that, going into this IPO, the company has not assumed any contingent liability. Additionally, the steady growth of the renewable energy sector worldwide will likely convince many Jamaicans to invest in this company.

Indeed, that reality was highlighted by Prime Minister Holness, who reminded guests at the IPO launch that renewable energy is the “future of investments”; therefore, Wigton, being an efficient operator, and by virtue of refining its skills in the private sector, “would be very well placed, competitively, to capture some of that newly determined space for procurement”.

That, he explained, bodes well for the company's longevity, especially given its focus on the use of other alternative forms of energy to drive the diversification of Jamaica's energy mix.

The operators of Wigton deserve to be congratulated. We wish them and the Jamaicans who will acquire shares all the very best. With the signs of a gradually improving economy, this is certainly a good time for Jamaicans to invest and share in any wealth created here.


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