JAMAICA’S fastest growing investment firm, Barita Investments Ltd, is proposing to issue up to 240 million new shares in the company’s second Additional Public Offering (APO) of shares within a year.
In a notice dated July 16, 2021, and posted on the website of the Jamaica Stock Exchange, the directors of Barita are seeking the approval of its shareholders at an extraordinary general meeting to issue up to 160 million ordinary shares “for the purposes of raising capital for the benefit of the company”.
At the August 3 meeting the shareholders were asked to approve the ability of the Barita directors to upsize the 160 million APO by an additional 80 million shares, bringing the total offer to 240 million, “in the event that the invitation is oversubscribed”.
In a second resolution that will be voted on at the extraordinary general meeting, the Barita shareholders will be asked to authorise the directors and the secretary of the company “to execute all steps” to implement the issue of the new ordinary shares “on terms and conditions as the directors may consider expedient in their absolute discretion”.
The resolutions are certain to be approved at the meeting because some of Barita’s directors are also shareholders in Cornerstone, which owns 74 per cent of the investment company.
Five Cornerstone shareholders are directors on the ten-member Barita board comprising Mark Myers, who is chairman of Barita, Paul Simpson, who is deputy chairman of Barita, Duncan Stewart, James Godfrey and Phillip Lee. Two other Barita directors, Jason Chambers and Carl Domville are executives of the company.
T&T’s First Citizens Investment Services (FCIS), a 100 per cent subsidiary of majority State-owned First Citizens Bank, is Barita’s second largest shareholder with 6.1 per cent.
FCIS acquired a 5 per cent stake in Barita at its September 2020 APO. The company raised J$13.5 billion by issuing 260,599,830 new shares in the APO at between J$49 and J$52.
FCIS acquired 54,280,154 shares in Barita Investment Ltd at J$52 a share in the APO. FCIS paid about US$19.5 million (J$2.82 billion) for those shares.
On December 4, 2020, FCIS acquired an additional 12 million shares in Barita on the floor of the Jamaica Stock Exchange. FCIS paid J$90 a share for those additional shares, with the total consideration being US$7.44 million (J$1.08 billion).
FCIS now holds 66,280,154 shares in Barita having paid an estimated total cost of about US$27 million for the two blocks of shares.
Responding to a question on the amount of money FCIS paid for the two blocks of Barita shares at FCB’s annual meeting on June 30, First Citizens (FCB) chief executive officer, Karen Darbasie said FCIS had “actually recorded a very good capital gain” on its investments in Barita.
“We continue to look for more investments, but they (Barita) are investments that were done in the normal course of business to capitalise on potential for gains and/or returns so that we could continue to deliver the positive growth in our profits for all of our shareholders,” said Darbasie, at the company’s virtual annual meeting.
Darbasie described the acquisition of the second block of shares as “another opportunity to purchase shares (in Barita) on the Jamaica Stock Exchange (JSE)”. Barita closed trading on the JSE yesterday at J$80.04. She did not answer the question on the amount of money the bank spent on the acquisitions, but assured it was done “in the normal course of FCIS’s business”.
On Monday afternoon, Express Business reached out to Darbasie by e-mail, seeking to find out if FCIS would be participating in the Barita APO. Darbasie, who is also a director of FCIS, was asked the following questions:
1) Has FCIS decided on whether it will participate in this new APO?
2) If yes to number 1, has FCIS decided on the number of shares it would be applying for?
3) If FCIS is not successful in acquiring the shares it applies for, will the company attempt to buy more shares across the floor of the JSE, as it did in December 2020?
4) Does FCIS know why Barita is seeking to raise additional capital at this time, less than a year after the September 2020 APO?
Up to late Monday, Darbasie had not responded to the questions.
The chairman of both FCIS and FCB is Anthony Smart, Port of Spain attorney and former attorney general under the National Alliance for Reconstruction between March 1989 and December 1991.