Derrimon Trading Company Ltd, which operates Sampars Cash and Carry, will seek to raise $250 million in a preference share offer this month.

It’s the latest move by the rapidly growing company to finance its expansion and refinace debt.

“Basically we are looking to reorganise our financing with cheaper funds, and to aid in our continued expansion,” Derrick Cotterell, chairman and chief executive, told the Jamaica Observer on Wednesday following an extraordinary general meeting at the Knutsford Court hotel in Kingston.

The meeting passed a series of resolutions aimed at allowing the raising of funds and the listing of the preference shares on the exchange.

“The company will seek to offer 125 million preference shares at $2,” he said, adding that the shares will be listed on the exchange via the broker Mayberry Investments.

“We are not increasing debt, but reducing it, and also replacing the debt with cheaper funds,” he explained.

The company’s borrowings actually grew substantially to $305 million up to September based on a recent loan.

“This was driven by a $200-million secured note at 12.25 per cent, which was utilised to retire short-term bank loans and credit lines, as well as to improve working capital. It also represents financing costs associated with the 49 per cent acquisition of Caribbean Flavours and Fragrances Ltd (CFF),” stated Cotterell in statements accompanying the September quarter 2014 financial report.

The borrowing resulted in Derrimon’s finance costs totalling $17.5 million for the September 2014 third-quarter, or about twice the level recorded a year earlier.

Derrimon made $5.9 million net profit on $1.5 billion in revenues in its September third-quarter 2014, which reversed a net loss of $1.8 million a year earlier.

In the September quarter, the directors approved the acquisition of 44 million shares at a price of $2.75 per unit of fragrance manufacturer CFF.

“We see this acquisition as a strategic long-term investment that will bring about positive long-term value to our shareholders. Notwithstanding our 49 per cent shareholdings, the company will continue to operate as a separate legal entity,” stated Cotterell in the company’s financial report.