Sygnus Credit Investments to raise more capital

2018-2019 record year for Sygnus

BY DURRANT PATE
Observer business writer

Wednesday, December 04, 2019

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Sygnus Credit Investments (SCI), the largest private credit investment company listed on the Jamaica Stock Exchange (JSE), is seeking to raise more capital to finance its growing lending portfolio.

Initially, the speciality credit investment company was seeking to raise $1.2 billion or the US-dollar equivalent. However, the St Lucia-based international business company has now upsized that amount to $4.5 billion (US$35 million).

The board of directors at their November 14, 2019 meeting approved the increase of capital to be raised by up to $4.5 billion. SCI, which has subsidiaries in Jamaica and the Cayman Islands, has advised the JSE that the raising of capital will be done in various tranches and may take the form of bonds, loans, notes or preference shares.

SCI provides non-traditional financing to medium-sized firms across the Caribbean region. Non-traditional forms of credit are more customised and flexible than traditional financing.

The company offers alternative channels through which medium-sized firms, which are typically underserved by traditional forms of financing, can access capital to drive their expansion and growth.

The need for additional capital comes as SCI is seeking to double its growth strategy from a US$40-million Caribbean pipeline. SCI reported that its just-ended 2018-2019 financial year was a record one, having reported net profit of US$2.1 million and record net investment income of US$2.2 million.

WHOPPING INCREASE IN DIVIDENDS

SCI also reported a 216 per cent increase in dividends paid for the fiscal year, which amounted to US$1.5 million. The strong growth experienced by the company was driven primarily by effective strategic execution, which saw investments in portfolio companies increasing from US$15.7 million US$34 million, an increase of 116 per cent.

At the same time, SCI experienced improving yield on its investment portfolio, moving from 10.20 per cent to 12.3 per cent.

Despite such notable growth, SCI business activities continue to be underpinned by robust risk management, which resulted in zero non-performing portfolio investments and well-diversified portfolio holdings across 19 companies in multiple sectors across Jamaica and other Caribbean countries.

The directors told shareholders at the annual general meeting last week that the company is targeting a doubling of its business ('2X Growth Strategy') over the next 18 months, given a robust pipeline in excess of US$40 million across the Caribbean. They were advised that the focus for 2020 and onwards will be driving growth in shareholder's value through the implementation of three key strategies:

(1) 2X Growth — tapping into and further developing their robust pipeline,and solidifying long-term strategic partnerships

(2) Working towards their goal of being the leading provider of flexible debt capital for middle-market companies, and

(3) Proactive risk management — preserving the value of shareholder's capital using robust tools, processes and portfolio monitoring.


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