Cornerstone Financial Holdings Limited (CFHL) has set January 20 as the meeting day for shareholders of Cornerstone United Holdings Jamaica Limited (CUHJ) and Barita Investments Limited to vote on the proposed scheme of arrangement.

Cornerstone Financial has indicated for more than two years that it intended to restructure the group of companies to establish a financial holding company (FHC) to make it compliant with the Banking Services Act. After submitting applications to the Jamaican Supreme Court, a date has finally been set for shareholders to vote on the proposed scheme of arrangement.

Currently, Cornerstone Financial Holdings owns 75.6776 per cent of Barita Investments while 15 shareholders own CUHJ with Productive Active Solutions Limited, a company whose executive chairman is Paul A Simpson being the largest shareholder with 42.18 per cent of the shares. CUHJ is the sole shareholder of Cornerstone Trust & Merchant Bank Limited (CTMB), Jamaica’s only merchant bank. CUHJ and CFHL have the same shareholder structure which is dubbed as the mirror principle.

Under the proposed scheme of arrangement, Barita Financial Group Limited (BFGL) would become the direct parent company of CTMB and Barita Investments and be the regulated FHC. CUHJ’s assets and liabilities would be assumed by CFHL, which would become the sole shareholder of Barita Financial Group. CUHJ would be dissolved at a later date. The scheme for both companies will be approved once shareholders vote in favour of each resolution which would result in more than 75 per cent of the votes approving the scheme.

The extraordinary general meeting for each company will be held at S Hotel Kingston (formerly Spanish Court Hotel) on Monday, January 20 with CUHJ’s meeting taking place at 10 am while Barita’s meeting will occur at 12 pm. If approved by shareholders, the court would have a hearing on March 18 to sanction the scheme which should take effect on March 31.

“The Cornerstone Group is about to embark on a new phase in its evolution as a group of companies as it seeks to undertake the reorganisation of the group. The group is excited about the prospects associated with its reorganisation and the attendant benefits, including the synergies to be unlocked through closer integration of the operating entities. We believe the reorganisation of the group will redound to the benefit of our customers, shareholders and other stakeholders as it will strengthen the group’s ability to identify attractive strategic opportunities for acquisition, enhance its commercial value, engender greater operational efficiency and further optimise its enterprise-wide risk management and governance across the group,” stated CUHJ and Barita Investments Chairman Mark Myers in the scheme booklet.

Approval of the scheme by Barita shareholders wouldn’t change their direct ownership in the company but just change the entity that holds the majority interest in Barita Investments. However, the company noted that a second scheme of arrangement would take place in the future to delist Barita Investments from the Jamaica Stock Exchange (JSE) and list Barita Financial Group instead, subject to the FHC licence being issued by the Bank of Jamaica (BOJ).

Cornerstone Financial Holdings is currently involved in a transaction to acquire up to 70.10 per cent of Clarien Group Limited from NCB Financial Group Limited and the other two shareholders. Clarien Group is a holding company for Clarien Bank Limited and its other subsidiaries based in Bermuda and the Caribbean and Latin American region. That deal should close within the first quarter of 2025 as per Ricardo Hutchinson, chairman of Portland JSX Limited.

Barita Financial Group is one of the last two FHC’s to have their FHC applications to be processed by the BOJ. Scotia Group Jamaica Limited was approved as a licensed FHC in 2024 with GK Financial Group Limited as the other FHC under consideration. A total of six FHCs have been licensed by the BOJ.

Barita closed 2024 at $73.54, which left the stock price down 0.68 per cent with a market capitalisation of $89.75 billion. Barita paid a $1.967 dividend totalling $2.40 billion on October 31 to shareholders on record as of October 17.

Cornerstone Financial has acquired an additional 6,264,791 ordinary shares in Barita over the last year to take their stake to 923,560,965 ordinary shares. First Citizens Investments Services Limited, a Trinidadian investment firm, sold 250,000 ordinary shares during the year to bring their stake to 90,545,154 ordinary shares or 7.4194 per cent. Ramon Small-Ferguson, the newly minted chief executive officer of Barita Investments, acquired an additional 359,564 ordinary shares to own 715,886 shares.