Portland JSX Limited is set to reap more gains from Portland Caribbean Fund II LP which is currently exiting several of its private equity investments.

With the first investment life cycle nearing an end, Portland JSX is set to benefit from the proceeds of the different investment exits that PCF II will be making over the next year. After benefiting from a partial exit in Grupo IGA earlier this year, an exit is now being structured to sell the equity PCF II owns in Grupo IGA. Grupo IGA is a restaurant platform in Colombia which owns and operates Kokoriko, Mimo´s y Andrés Carne de Res.

Portland JSX had previously received about US$9.5 million inflow in its 2023 financial year (March 2022 to February 2023) when PCF II exited its investments in InterEnergy Group & IEH Penonome Holdings. During the first six months of its 2025 financial year (March 2024 to August 2024), the company received US$2.84 million in inflows as it received US$2.1 million related to the exit of Grupo IGA debt investment and US$0.7 million in dividend inflows, mostly from Clarien Group Limited.

“We were having ongoing discussions. We certainly understand where we are in the lifecycle of the fund and have been looking at different options for exits for all our portfolio investments. So, yes, there were discussions taking place prior [to the PBS suspension],” said Portland JSX Chairman Ricardo Hutchinson at the company’s virtual annual general meeting held last Thursday.

Hutchinson was appointed as a director and board chairman on July 12 following the resignation of Douglas Hewson, the previous chairman of Portland JSX. Hewson is a managing partner at Portland Private Equity.

Portland JSX is a limited partner that co-invests alongside PCF II into different private businesses across Latin America and the Caribbean by taking either equity positions or providing mezzanine or debt financing. Over the last nine years, Portland JSX has made cumulative capital investments of US$30.98 million through PCF II relative to its original US$32 million investment commitment. These funds were deployed into 10 companies with eight companies remaining in this investment portfolio.

While PCF II’s exit in Productive Business Solutions Limited (PBS) is currently stuck due to the suspension of its ordinary and preference shares on the Jamaica Stock Exchange, it is now awaiting regulatory approval related to its full exit in Clarien Group Limited, a Bermudan holding company that owns Clarien Bank Limited. Hutchinson noted that this deal should close by the end of this year with a hard stop date during the first quarter of 2025.

PCF II owns a 17.92 per cent stake in Clarien Group Limited while Edmund Gibbons Limited owns 31.98 per cent along with NCB Financial Group Limited (NCBFG) which owns 50.10 per cent. NCBFG had announced earlier this year that it was selling 30.20 per cent of Clarien to Cornerstone Financial Holdings Limited (CFHL). A previous comment by Robert Almeida, NCBFG’s CEO, noted that CFHL would own 70.10 per cent of Clarien after the sale. This implies that Edmund Gibbons would be selling 21.98 per cent of its stake in Clarien.

PCF II owns a 40 per cent stake in Diverze Assets Inc, which owns stakes in Tropical Battery Company Limited, Diverze Properties Limited and Chukka Caribbean Adventures Limited. The Portland JSX chairman noted that Diverze Properties is looking to monetise some of the properties in its portfolio over the coming months which would provide distributions for the PCF II Fund. However, he noted that Chukka is actively looking at restructuring its balance sheet due to the debt it incurred during the COVID-19 pandemic.

“We believe that there is a strong possibility of getting an exit on Chukka. The company is certainly performing well and with that, you’d expect there to be demand for equity in that entity. So, whether it’s through an IPO or secondary sale or sale to a third party, we believe that there will be a market for the equity for that entity,” Hutchinson stated.

As it relates to Merqueo Holdings, Interlinc Group and Outsourcing Management Limited (trading as Itel), Hutchinson noted that they’re not actively engaging in investment exit discussions but are working with the portfolio entities to help restore improve their value. Merqueo is a Colombian e-grocer which missed its opportunity to go public and raise new equity capital during 2023. After doing some level of restructuring, it is now seeking to raise more capital to expand its business. PJX invested US$4.5 million directly into Merqueo during its exit of portfolio investments in 2022, but later wrote down that investment in 2023.

Interlinc is still currently burdened with debt incurred during the pandemic and is looking to restructure some of these debts while selling some of its operations to boost its working capital. This business is chaired by Paul B Scott and run by CEO Jason Corrigan.

Itel has had some losses in the last two years with the business even shutting down its Guyana operations by the end of this year, a move which will result in about 400 lost jobs. PJX wrote down its US$5 million preference share investment in Itel to US$1, a move which also saw the preference share liability used to fund the investment being written down to US$1. Hutchinson also confirmed that PCF II has written down the overall 15 per cent equity investment in Itel which also mirrors Pan Jamaica Group Limited decision to write down its entire 15 per cent equity investment during 2023 which was carried at $606.36 million.

With PCF III currently in fund-raising mode, Portland JSX’s expenses have gone up commensurately with the company paying a US$320,000 organisational expense or one per cent of its US$32 million during its 2024 financial year. The rise in fees and operational expenses is also attributed to the two per cent management fee or US$640,000 payable quarterly in relation to PCF III.

“Once PCF III has identified investment opportunities, then we would look to deploy that cash to fulfil our obligations under that commitment. So, we would expect that most of the cash would go towards that [fund],” Hutchinson added.

He also noted that he doesn’t expect anymore major write downs for Portland JSX whose asset base peaked in February 2023 at US$40.45 million before it was written down to US$26.04 million as of August 2024. The company had US$5.20 million in cash at the end of August.

Portland JSX’s stock price closed Tuesday at $10.80 which left it with a market capitalisation of $3.35 billion. Portland JSX’s shareholders are mainly composed of pension funds.

“We’re implementing different strategies as we go along because we’re still a minority shareholder. As it relates to structuring, we’re looking at things like self-liquidating structures. So, as things stand, either we’re doing more preference shares as opposed to ordinary equity. So, preference shares with an equity kicker or putting in a buy back clause in our investments,” Hutchinson said.