Less than a month after Sygnus Credit Investments Limited (SCI) executed its successful US$27.6-million ($3.9-billion) additional public offering (APO), Sygnus Real Estate Finance Limited (SREF) has confirmed its intention to list on the Jamaica Stock Exchange (JSE) in 2021.

This was confirmed at the JSE’s 16 Regional Conference by co-founder of the Sygnus Group, Berisford “Beris” Grey, during the CEO’s Meet the Press session yesterday.

Although Grey didn’t provide any specific details about the offer, he did confirm SREF’s intention to take the next step and join SCI on the JSE as a listed company through an initial public offering (IPO). SREF is led by David Cummings who is also a vice-president of the Sygnus Group.

SREF is the real estate arm of the Sygnus Group which specialises in providing financing with an exit timeline of five years through brownfield or greenfield methods. SREF raised US$16.2 million from a private placement in August 2019 and has deployed funds in several projects across Jamaica. This will be one of the 14 known capital raises in the form of IPO’s and APO’s which are expected to go through the JSE this year.

During his presentation, Grey highlighted SCI’s outlook and ability to capitalise on its existing deals based on their selective due diligence process, which has left the company exposed to the larger firms in specific industries that will be able to capitalise on an economic recovery.

He further posited that there would be green shoots coming from the COVID-19 crisis after some of investments (portfolio companies) made through Sygnus affiliates capitalised on the environment through mergers and acquisitions which would leave them stronger in the new space.

Grey calmed concerns by attendees who were worried about the company’s (SCI) exposure to tourism which the CEO of Sygnus Capital explained was effectively managed and small based on the 20 per cent industry risk cap.

Audrey Tugwell Henry, president and CEO of the Scotia Group, noted that barring any secondary events, the Jamaican economy should see a solid recovery over the next three years as the growing demand for industries such as entertainment and tourism builds up for a return to a relative normal. Even with members of the audience querying about the debt built up over the period, Tugwell Henry explained that Scotiabank gave a moratorium to clients for three months at the start of COVID-19 and renegotiated terms with clients who were still in dire straits months later. She then pointed out that some clients might need to source other means of financing other than bank loans when the environment becomes more suitable to operate profitably.

Even with the passage of the Microcredit Act, Jacinth Hall Tracey, CEO of Lasco Financial Services Limited (LASF), who is also a member of the Jamaica Micro Financing Association (JAMAF), welcomed the legislation to the industry. Hall Tracey pointed out that although she hasn’t seen the 12 amendments made recently in the Senate, the main point of contention surrounding interest rates was resolved in the most recent iteration of the Bill. Although some firms might end up closing down since the space wouldn’t be as attractive to them, the CEO of LASF, which is listed on the JSE, indicated that the exit of existing players whenever a sector is regulated is normal. She made mention of the fact that members of JAMAF were already self-regulating and the new legislation shouldn’t significantly impact members which were operating above the bar.