Blue Power Group split


Blue Power Group split

Observer Business Reporter

Friday, August 16, 2019

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Blue Power Group Limited (B Pow ) has obtained shareholders' approval to split the company into two independent publicly traded companies — one comprised of its Blue Power soap division, and the second a newly created entity of its lumber depot division, New Lumber Depot.

Shareholders were able to approve the special resolution at the company's annual general meeting and extraordinary general meeting held on Wednesday last (August 14) at the Guardsman Group Office in Kingston.

Managing director, Major Noel Dawes in an interview with Jamaica Observer expressed his content with the shareholders' approval.

“If we don't have the majority shareholders accepting the resolutions we can't move forward.

“We are going to proceed now by going to our lead broker, which is Mayberry; we will work alongside them to produce an initial public offering to take to the market,” Dawes stated.

He added that the company along with Mayberry will complete the prospectus — a formal document that provides details about an investment offering for sale to the public — and submit it to the Jamaica Stock Exchange (JSE) for consideration.

“The JSE will review it (prospectus) and see if there is justification to it; if there are any problems with it, the conflict they may see arising from it and then we work through each point as they bring it up,” Dawes told The Caribbean Business Report.

“We are working at that assiduously, as we speak and we hope that we will be bring it out in the near future, certainly before the end of the year,” he continued.

The company's decision to separate its divisions is influenced by the Group's financial performance.

BPow reported an after-tax profit of $139 million for the financial year which ended on April 30, 2019. This represents a 36 per cent increase compared with the corresponding period last year.

Overall sales for the 12 months are up by 10 per cent from $1.508 billion to $1.666 billion, with the lumber depot division showing an increase of 12 per cent, while the Blue Power soap division improved by six per cent.

The company stated in its financial report that this upward trend is likely to continue and expect sales levels to increase in keeping with inflation and extra business activity.

It added that the separation of the division would provide additional benefits in terms of providing the acquisitions and/or mergers in the same areas of activity and ultimately presents the possibility of New Lumber Depot becoming a distributor of building materials.

The managing director indicated that when the separation is completed and in effect, the two companies will be listed on the JSE website and the public will be able to purchase shares in both. In addition, the companies will appoint new board members and have separate management systems implemented.

As for existing shareholders, Dawes assured that shareholders on record as at August 1, 2019 will continue to hold their existing ordinary stock units of the company to be transferred to New Lumber Depot.

The shareholders also approved the special resolution of the transfer of the assets and related liabilities and transaction costs of the lumber depot division of the company to New Lumber Depot.

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