Business

One more dividend

•Campari to make additional payout to Lascelles shareholders after purchase •Carreras shares, Globe Insurance, car dealerships up for sale

BY JULIAN RICHARDSON Assistant Business Co-ordinator richardsonj@jamaicaobserver.com

Wednesday, September 05, 2012    

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SHAREHOLDERS in Lascelles deMercado are to receive another big payment following the sale of the Jamaican rum portfolio to Campari.

The Italian company, which this week announced it was buying Lascelles' rum and merchandising business, said net proceeds from the divestment of the "non-acquired assets" will be paid to current shareholders of Lascelles by way of one-time extraordinary dividends.

The non-aquired assets of Lascelles, which include Globe Insurance, Sterling Motors, Kingston Industrial Garage, and shares in Carreras — are valued at US$88.4 million ($7.9 billion) against liabilities of US$44.1 million.

Lascelles, in May, announced that it was negotiating the sale of Globe with a preferred bidder.

Campari intends to purchase full ownership in Lascelles for US$414.8 million or US$4.32 per ordinary share.

At US$4.32 a share, the purchase offer for Lascelles is a 10 per cent premium on its current value on the Jamaica Stock Exchange.

Lascelles share price has risen by 28 per cent since the deal was announced to $350.99 or US$3.93 a share.

The sale of Lascelles will likely ease troubled CL Financial's financial woes.

The Italian firm's offer to acquire full ownership in Lascelles is almost a 40 per cent discount on what CL Financial paid for 87 per cent of the company in 2008. But the US$336 million that CL Financial will get for its current 81per cent stake will likely cover the debt it still carries from the purchase of the Jamaican company.

CL Financial raised external debt financing in the amount of US$450 million to finance the Lascelles acquisition which amounted to US$676 million.

But the conglomerate ran into liquidity problems in 2010 and had to be bolstered with cash by the Government of Trinidad and Tobago.

Last year, it also faced difficulty making final payments on bonds valued at US$342 million.

Campari has been on a global shopping spree for more than a dozen years as it seeks to expand the 150-year-old company beyond production of its eponymous brew of herbs into new spirit and beverage lines. It is only acquiring two segments of Lascelles: the flagship rum portfolio, which includes the Appleton, Wray and Nephew White Overproof and Coruba brands; and the mechandising operations, focused on the warehousing, sales, marketing, and distribution of a wide range of third-party branded products from well known consumer goods companies.

Lascelles deMercado, formed in 1825, has the largest stock of aged Jamaican rum in the world — the popular Appleton Jamaica Rum — which is distributed by subsidiary company J Wray & Nephew. In Fiscal Year ended September 30, 2011, the rum and spirits portfolio achieved total sales volume of 3.5 million, nine- litre cases.

The company more than doubled net profits to $5.8 billion for the nine months ending June 30, 2012 compared to the corresponding period last year.

Lascelles marks the third- largest acquisition in Campari's history. The Italian aperitif maker has already agreed to acquire CL's present 81.4 per cent stake in Lascelles and plans to offer to buy the remaining shares.

The transaction is expected to be completed by the fourth quarter of 2012.

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