Sygnus makes first investment since IPO

Sunday, July 01, 2018

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Sygnus Credit Investments Limited (SCI) says it has completed its first investment since its recently closed US$20-million initial public offering (IPO) in May.

According to the company, it invested the equivalent to US$2.1 million in a medium-sized firm in the petroleum industry.

“The financing was customised to allow the petroleum firm to reduce its overall debt burden while freeing up cash flow, and was in line with its strategic growth plans,” SCI said in a news release.

Regarded as the largest, listed, private credit investment company in the region, Sygnus said that the investment adds diversification and enhanced returns to its private credit investment portfolio, which, based on information in its recently concluded IPO prospectus, was yielding 10.3 per cent in US dollars as at December 2017.

Pointing out that it has a diversified portfolio of credit investments in the medium-sized sector spanning the manufacturing, distribution, petroleum, and mining industries, Sygnus said now that it is “armed with the new capital raised from the IPO”, it is “actively pursuing private credit investment opportunities in medium-sized firms in Jamaica and the wider Caribbean”.

The IPO, which was aimed at raising US$10 million ($1.2 billion), tripled its subscription target, raising a total of US$33,558,213.40 ($4,216,180,103.56) for both share classes. The company received over 2,560 applications in the Jamaican- dollar class valued at $2,833,493,850, while 874 applications were submitted in the US-dollar class valued at $11,005,336.40.

In light of the oversubscription, Sygnus opted to upsize the reserve share applicant pool by 100 per cent to 80,000,000 ordinary shares, while the general public pool was upsized by approximately 117 per cent to 110,818,040 ordinary shares.

According to the company, subscribers spanned a wide cross section of investors, including pension funds, unit trusts, insurance companies, high net worth and retail investors, making it the largest IPO for a private credit investment company in the Caribbean.

Lead broker and co-arranger Sagicor hosted investor briefings in Montego Bay and Kingston to give prospective investors an opportunity to engage the principals and learn about the company's prospectus and future plans.

In an interview with the Jamaica Observer last August, Sygnus Chief Executive Officer Berrisford Grey had pointed to the company's focus on the private credit investment market, saying that the firm intended to be the leader in what he termed the “non-traditional space” in five years.

In addition, Grey said that Sygnus also envisioned its other business lines, such as its investment banking business, to be dominant players in the mergers and acquisitions space especially.

“That's an area that we believe we have the skill set and experience to really help companies across the region, in terms of buying and selling companies and creating the right value for new or existing owners,” he said.

“On our other business lines, such as our international portfolio management business, that's an area where we expect again to be a dominant player, where we help clients — true to our philosophy — to access international investment opportunities and managing their portfolio to generate returns. Sygnus should, at that point, be best in class in terms of what we give to customers, in terms of value and international portfolio management,” Grey said.

“Our final business line, which is our tax advisory — and we are the only finance firm in the Caribbean that does this — we expect that business to be similar to the other business lines and to be the dominant advisory business right across the region, in terms of helping companies with tax compliance and creating tax efficiency for companies,” he added.

“In a nutshell, Sygnus's goal is to be the leading, non-traditional financing firm in the region, and that basically means that we… become the dominant player in our three lines of business.”

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