Eppley hunting $1.2b to refinance debt
Published:Wednesday | July 7, 2021 | 12:09 AMSteven Jackson/Senior Business Reporter
Investment company Eppley Limited aims to raise a $1.2 billion from the issue of three classes of preference shares on the Jamaica Stock Exchange this month, which will refinance existing debt.
The offer priced at $20 per share will be available for subscription from July 12 to 26.
“It is the single biggest raise for Eppley Limited, not including equity raises in the funds we manage or are affiliated with,” said Eppley Managing Director Nicholas Scott.
Investors buying preference shares receive interest on these shares, at regular intervals, usually monthly or quarterly, but do not have the same voting rights that holders of ordinary shares possess.
“The preference shares will not carry the right to vote save in narrowly prescribed circumstances, including when any dividend has not been paid for more than three months; or on a winding up of the company; or on a proposed variation of the rights of the holders of the preference shares,” the Eppley prospectus stated.
The investment company, which mainly provides financing to other businesses, intends to use the proceeds primarily to “refinance existing indebtedness”.
Under the offer being brokered by Sagicor Investments Jamaica, Eppley plans to raise $300 million from a preference stock that will pay interest at 5.0 per cent per annum and matures in 2023; another $500 million from another that will pay interest at 7.25 per cent and becomes due in 2026; and $400 million from a 7.75 per cent stock that matures in 2028.
The debt that Eppley wants to refinance from the offer proceeds includes a US$1.5 million note due August 2021, which pays interest at 4.75 per annum; $361.6 million of preference shares due December 2021 that pay interest of 8.25 per cent per annum; a $335 million note due July 2022 which pays interest at 8.0 per cent per annum, and $250.0 million preference shares due December 2023 that are being serviced at an annual rate of 8.75 per cent.
Eppley mainly earns money from its investment portfolio, which stood at $4.15 billion in March, as well as the fees it earns from its asset management business. Funds in the investment portfolio are allocated 32 per cent to loans; 21 per cent in cash and bonds; 20 per cent in leases, and 27 per cent towards a combination of insurance premium financing, mezzanine financing, real estate, infrastructure and asset management.