PanJam sells New Castle stake
PAN Jam Investments has sold its 33.3 per cent stake in New Castle Company which owns the Walkerswood, Busha Browne’s and Jamaica Joe brands.
The disclosure was made Monday on the Jamaica Stock Exchange (JSE) where it stated that the transaction was effected on December 21, a day before its extraordinary general meeting (EGM). There was no mention of the sale at the EGM.
Walkerswood Partners Limited was originally acquired by New Castle Company Limited for $350 million in May 2009 under a court-sanctioned scheme of arrangement. This paved the way for a US$5-million rescue plan after its subsidiary Walkerswood Group became insolvent and had $375 million of current liabilities in excess of current assets. Even Jamaican Teas Limited entered a bid at the time to acquire the Walkerswood factory.
“Our investment in New Castle was in line with PanJam’s strategy to take meaningful equity positions in Jamaican companies with strong brands, foreign exchange earning potential and a global reach. New Castle has certainly carved a niche for itself in the specialty food space. While we expect the company to continue on its growth trajectory, PanJam’s investment objectives have been met,” said PanJam Chief Executive Officer Joanna Banks in the JSE disclosure.
Following the successful acquisition, Associated Manufacturers Limited (AML) merged its business with Walkerswood which resulted in the combined entity having facilities in Kingston and St Ann. PanJam originally held a 25 per cent stake in New Castle where it invested $177.52 million. New Castle reported $418.03 million in revenue, $60.61 million in net profit and $461 million in total assets for 2009.
PanJam acquired an additional 8.33 per cent of New Castle in 2017 for $132.78 million when the company earned $1.72 billion in revenue, a net profit margin of 15.3 per cent and had total assets of $1.69 billion. New Castle earned $2.77 billion in revenue for 2021 and had $796.19 million in net profit. PanJam’s associate stake was valued at $829.29 million which included it receiving a $65.69 million dividend with its stake at the company level valued at $310.31 million. New Castle is a St Lucian international business company (IBC) which was held by PanJam and the principal AML.
PanJam did not disclose the sale price, but it’s likely to be disclosed in its 2021 audited financials, which are expected to be submitted by March 1. PanJam is set to acquire 100 per cent of JP Global Holdings, which will make it a $110-billion company by consolidated assets. The transaction is expected to be completed by March 31, with Jamaica Producers Group to receive a 34.5 per cent stake in PanJam which is to be renamed the Pan Jamaica Group Limited. The sale of PanJam’s New Castle stake comes at a time when JP Group managing director Jeffrey Hall retired from the board of Scotia Group Jamaica Limited on December 9. JP Group produces a line of snacks, drinks and other food products under the St. Mary’s, JP Farms, Hoogesteger and Tortuga brands.
