Business

Derrimon Trading shareholders approve redeemable preference shares issue

BY BALFORD HENRY
Senior staff reporter
balfordh@jamaicaobserver

Tuesday, March 13, 2018

Print this page Email A Friend!


Derrimon Trading Company Limited (DTL) has obtained shareholders' approval for issuance of some 400,000 Redeemable Preference Shares to refinance existing debt.

Shareholders attending Tuesday's Extraordinary General Meeting (EGM) also agreed to changes to its Authorised Share Capital and Articles of Incorporation in order to facilitate the issuance of the Redeemable Preference Shares.

Shareholders involved with last week's meeting at Knutsford Court Hotel, New Kingston, both those present or who voted by proxy, were solidly in favour of the resolutions.

The board sought the approval of the shareholders to issue the additional preference shares to redeem the 2015 Redeemable Preference Shares, as well as to issue additional preference shares from time to time, subject to the limit of un-issued preference shares in existence at any given time, in order to take advantage of falling interest rates and to lower the overall borrowing costs of the company.

DTL's Chairman and CEO Derrick Cotterell in a letter to shareholders on February 7 recalled that on February 4, 2015, they had authorised the company to issue 125,000,000 Three-Year Cumulative Redeemable Preference Shares. Those shares, he said, were issued on March 12, 2015 by the board in accordance with the shareholders' authorisation. The 2015 Redeemable Preference Shares will fall to be redeemed on March 12.

The law requires that the 2015 Redeemable Preference Shares be redeemed either from profits, or the proceeds of a new issuance of redeemable preference shares. Of the two options available to the company, the board decided that the more cost-effective method was to use a new issuance of redeemable preference shares, for the following reasons: the low interest rate environment; no capital redemption reserve account; preserves cash.

The resolutions approved at the meeting were:

(1) An ordinary resolution to increase the authorised share capital of the company to create an additional 400,000 shares;

(2) An ordinary resolution to designate the 400,000 newly created shares as redeemable preference shares and granting the board authority to issue those shares from time to time and to designate the rights and restrictions attached to those redeemable preference shares; and

(3) A special resolution to amend the Articles of Incorporation of the company to grant the board authority to issue redeemable preference shares from time to time with default terms of redemption.

Cotterell told the recent Mayberry Investment Limited (MIL) monthly investment forum, in New Kingston, that the company is currently upgrading its software to allow shoppers to scan items inside its operations as it moves towards introducing digital checkouts. However, he said that the process could take at least a year.

He said that some of the challenges the stores would face in introducing digital systems included that bar codes on some items distributed locally are written for Latin American markets, and do not digitally translate to the equivalent in the North American process.

He also noted that while customers would see new technological options in 2019, it was not likely that a cashless checkout option would be available to them up to then.

ADVERTISEMENT




POST A COMMENT

HOUSE RULES

1. We welcome reader comments on the top stories of the day. Some comments may be republished on the website or in the newspaper � email addresses will not be published.

2. Please understand that comments are moderated and it is not always possible to publish all that have been submitted. We will, however, try to publish comments that are representative of all received.

3. We ask that comments are civil and free of libellous or hateful material. Also please stick to the topic under discussion.

4. Please do not write in block capitals since this makes your comment hard to read.

5. Please don't use the comments to advertise. However, our advertising department can be more than accommodating if emailed: advertising@jamaicaobserver.com.

6. If readers wish to report offensive comments, suggest a correction or share a story then please email: community@jamaicaobserver.com.

7. Lastly, read our Terms and Conditions and Privacy Policy



comments powered by Disqus
ADVERTISEMENT

Poll

ADVERTISEMENT
ADVERTISEMENT

Today's Cartoon

Click image to view full size editorial cartoon
ADVERTISEMENT