Eppley seeks to raise $384 million from new preference shares issue
Boutique investment company Eppley is inviting applications for a new issue of cumulative redeemable preference which pays dividends of 8.25 per cent per annum and which will mature in November 2021.
The offer is for 64 million new preference shares. They are priced at $6 per unit.
JMMB Securities Ltd is acting as lead broker and listing agent. The invitation opens tomorrow and closes on Thursday, 1 December 2016.
The offer is subject to an overallotment option which could see the company raising between $340 million and $684 million. As outlined in the prospectus, the company reserves the right to issue 50 million additional 2021 preference shares in the event of oversubscription.
The first dividend payment is set for December 30, 2016. Thereafter, dividends will be payable monthly on the last day of each month.
Eppley says it intends to use the proceeds of the invitation to fund credit facilities. It will also pay the expenses of the invitation, projected at $11 million.
Since the company’s initial public offering and listing on the Junior Market of the Jamaica Stock Exchange in mid-2013, directors note Eppley has invested more than $1.5 billion in the expansion of its credit business.
It has raised and deployed over $1.37 billion in capital between June 2013 and May 2016. This included two offerings of preference shares — 2018 preference shares and the 2019 preference shares issued in November 2013 and November 2014, respectively.
The company went to the market in May with a rights issue.
As at 30 September 2016, the company had total investment assets comprising cash, loans and leases of $1.576 billion.
The average annual yield on the investment portfolio made up of its income-producing assets was 18 per cent, the prospectus indicates.
The portfolio’s average maturity was approximately one year. Net asset value as at 30 September 2016 was $524.04 per ordinary stock unit.
Eppley said the success of the new preference share offer depends on the subscription of not less than 25 million units. It intends to apply to the Jamaica Stock Exchange to list the shares on the Junior Market.
