FIRSTCARIBBEAN International Bank (Jamaica) Limited (FCIBJ) has sought to be delisted from the Jamaica Stock Exchange (JSE) after years of not complying with the listing agreement that requires at least 20 per cent of the company not be owned by one person.

Yesterday, in a notification to the JSE, FCIBJ’s board requested that the JSE exercise “its discretion under rule 411A of the JSE Rules to delist the ordinary shares of FCIBJ with effect from close of business on December 30, 2011”.

Rule 411A states that the exchange may in its discretion delist or suspend trading of the securities of a listed company, for any of five reasons, but JSE deputy general manager Robin Levy confirmed that FICBJ failed to meet the requirements of the Listing Agreement.

He explained that for some time, the JSE had granted FCIBJ a waiver, which would give FCIBJ time to comply. However, the bank finally decided to go for delisting.

In a press statement issued yesterday, FCIBJ said its board “determined that, given the size of the market, it will not be feasible for the proportion of non-majority held shares to be raised to the minimum required by the JSE rules in the foreseeable future”.

At present, only 3.7 per cent of the shares in FCIBJ are not owned by its Barbadian-based parent, FCIB (91.5 per cent owned by Canada’s CIBC), but the bank failed to meet that rule at least since 2002, when FCIB already held 82.23 per cent of the shares.

Since, FCIB increased its stake to 94.6 per cent in 2003, when it did a swap of shares in the Jamaican subsidiary for its own shares, and then diluted minority shareholders from 5.4 per cent to 3.7 per cent in January 2006 in exchange for a US$20 million capital injection into FCIBJ from the parent.

According to the JSE notification, “If the board of the JSE exercises its discretion to delist the shares FCIBJ plans to afford minority shareholders the opportunity of disposing of their shares by purchasing for cancellation, such shares as are offered to it, up to December 29, 2011 at a fixed price of not less than $13.25 (52-week high)”.

The offer would represent a more than 100 per cent premium on the shares’ last traded price of $6.50.

FCIBJ plans to issue its parent ordinary shares equivalent in value to the shares purchased by the bank from the minority shareholders, or $130.3 million worth of shares for cash, in order to “avoid any diminution in the bank’s stated capital value as a result of the bank’s purchases of shares from the minority shareholders”.

Over the last 12 months, FCIBJ shares traded on only 17 of the days the JSE was open and on those days an average of 5,204 shares crossed the floor. The share last traded on November 4, 2011 when 368 shares were traded.