JMMB Group to Raise Over J$6B to Propel Growth Strategy
Regional financial conglomerate, JMMB Group Limited (JMMBGL) is seeking to raise J$6 billion from its new preference share offer, which is set to open on Tuesday, February 16 at 9:00 a.m.
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The proceeds of the new preference share offer will be used to support the JMMB Group’s continued expansion both locally and regionally. JMMB Group CEO, Keith Duncan, outlined, “The offer provides a win-win opportunity for investors as we seek to add value for new and existing preference shareholders through our sustained growth strategy that is centred on diversifying our business model; expansion of our current business lines in the markets in which we now operate, and taking advantage of strategic opportunities, including acquisitions.” Adding, “As JMMB Group seeks to advance its growth strategy and further build out its offerings it will continue to tap the market to allow investors to benefit from the attractive returns offered by its preference shares and partake in the vision of the company.”
JMMB Group’s Strategic Build-out & Growth
Since its last preference share offer in 2018, JMMB Group has deepened its presence in the countries in which it operates, as evidenced by the growth of its business lines and market share. JMMB Bank (Jamaica) Limited’s loan growth outpaced the industry during the 2019/20 financial year and JMMB Money Transfer has seen an uptick of 32% in its profits as the entity captured more market share, over the last financial year. Additionally, the JMMB Group has expanded its suite of offerings in Trinidad & Tobago to include: consumer lending through JMMB Express Trinidad & Tobago, rolled out JMMB SME Resource Centres in Trinidad & Tobago and Jamaica and diversified and broadened its market reach in the Caribbean asset management and insurance markets through the acquisition of a 22.5% stake in Sagicor Financial Corporation (SFC), making JMMB Group Limited SFC’s single largest shareholder, a move that is in keeping with JMMB Group’s strategic direction to grow through inorganic means.
This growth is complemented by the Group’s credible performance for the six-month period ended September 2020, which saw the company, reporting net profit of J$2.42 billion. Though this reflects a 14% decline in its profit, when compared to the corresponding prior reporting period, this performance was attributable to the economic slowdown and uncertainty in the market, as a result of the COVID-19 pandemic. Nevertheless, the Group’s core earnings remained positive, over the period, as evidenced by an 8% growth in net interest income, which totalled J$4.9 billion, as a result of the solid growth in the Group’s loan and investment portfolios.
JMMB Group’s stable outlook has been reiterated by rating agency, Caribbean Information and Credit Rating Services Limited (CariCRIS), which in September 2020, reaffirmed the Group’s corporate credit ratings of jmA+ (local currency rating) and jmA (foreign currency rating) with a stable outlook on the Jamaica national scale. The stable outlook is premised on CariCRIS’ expectation that the Group’s financial performance will continue to be good over the next 12-15 months.
The Group, as part of its strategic thrust, is seeking to further pursue inorganic growth to bolster the organic growth it has experienced, over the last financial year; with plans to expand its banking business line inorganically, as well as tap new markets in the near future.
Details of the Offer
Approximately 2 billion cumulative redeemable preference shares are being offered at a price of J$3.00 per share, subject to the terms and conditions contained in its prospectus. The cumulative redeemable preference share offer, consists of 1.5 billion cumulative redeemable preference shares, to be offered to clients at a fixed rate of 7.35% for 84 months, while the non-clients will receive a fixed rate of 7.15% for 84 months on the remaining 500 million shares. A minimum of 20,000 shares may be purchased with additional increments of 1,000 shares.
The three-week-long offer, is scheduled to close on Tuesday, March 9 at the end of the business day; with the option of closing the offer sooner, should it be fully subscribed.
In keeping with
the thrust towards a more seamless digital process, investors interested in participating in the offer, can apply using the digital platform from either JMMB Group or NCB Capital Markets, namely: JMMB Moneyline and GoIPO, respectively. JMMB Group clients can also sign up for JMMB Moneyline via the company’s website.
The prospectus which was published on February 9, outlined that JMMBGL has the option to upsize the offer by up to an additional 1 billion cumulative redeemable preference shares, thereby raising up to J$9 billion.
Following the closing of the offer, JMMB Group Limited will make an application to the Jamaica Stock Exchange (JSE) to list its preference shares, in order to facilitate trading.
JMMB Group notes that cumulative redeemable preference shares will provide investors with the opportunity to benefit from attractive, stable and solid returns. Keisha Forbes Ellis, chief country officer, JMMB Group – Jamaica, in underscoring this point shared, “In addition to investing in the vision and solid track record of the company, the monthly dividend payments over the tenure of the offer is ideal for investors who want a consistent income stream, which can also be reinvested to further bolster returns and their portfolio.”
Click here to apply for the JMMB Group Preference Share offer