JAMAICA-BASED energy firm Tropical Battery has extended the closing date for its $1.79-billion (US$11.09-million) secondary share offering for the second time in weeks, to July 4, raising questions over investor appetite for the capital raise needed to repay debt. The company cited institutional investors requiring more time for internal processes.

The extension to July 4 follows an earlier delay pushing the deadline from June 6 to June 20. Tropical Battery stated the move allows “prospective investors… additional time to complete their internal investment processes,” reflecting its “commitment to enabling broad-based investor access”. Institutional investors like pension funds and insurance companies typically undertake multi-stage reviews involving analyst assessments and investment committee approvals before committing funds. Tropical’s first extension also cited the need for investors to “conclude their investment process”, prompting market observers to question whether the company, arranger Sygnus Capital Limited, and co-brokers NCB Capital Markets (NCBCM) and Sagicor Investments Jamaica misjudged the necessary timeline.

The delays occur against a backdrop of mixed results for recent Jamaican secondary offerings. While previous APOs by Kingston Properties Limited, Derrimon Trading, Sygnus Credit Investments, Barita Investments, and JMMB Group all succeeded, exceeding targets and upsizing, recent attempts faltered. 138 Student Living raised just $510.48 million in September 2023, barely above its $500-million minimum but far below its $2.15-billion target. A year ago, NCB Financial Group secured only $2.48 billion versus its $5.10-billion goal. Both aimed to reduce debt.

Tropical Battery has not disclosed any potential upsizing of its offer, which could raise up to $2.10 billion, suggesting subscriptions may not yet exceed the base $1.79-billion target. It recently added JMMB Investments as a selling agent. The company must raise a minimum of $1 billion for the offer to succeed. Proceeds will primarily repay a US$9.5-million ($1.53 billion) bridge loan from CIBC Caribbean Bank, settle a maturing $300 million-bond, and provide working capital.

The offer faces additional headwinds. Tropical Battery risks suspension from the Jamaica Stock Exchange (JSE) if it fails to submit its overdue second-quarter report by Friday.
That report was due from May 15. The company cited delays consolidating accounts following its acquisitions of US-based Rose Electronics Distributing and Dominican Republic’s Kaya Energy Group. These deals turbocharged performance, doubling Q1 revenue to $1.61 billion, but financing costs related to Rose Electronics halved profit to $35.50 million.

Tropical has a recurring pattern of delayed financial reporting. Its 2023 audited results, due November 2023, were submitted in February 2024 post-Kaya acquisition. Similarly, 2024 audited results arrived in February 2025 after the Rose deal. Its Q1 report was filed over a month late on March 13. As a Junior Market listed company, Tropical avoids monetary penalties for these breaches. It hired a group financial consultant in May to strengthen controls.

The stock traded at $2.04 on Monday, a premium to the APO price of $1.87. Only two equity reports are known: NCBCM recommends “participate” with a $2.75 target; Sagicor advises “participate” with a $2.24 target. Sygnus Capital Group Limited, parent of the arranger Sygnus Capital Limited, holds a 1.46 per cent stake.

Success is critical for Tropical’s strategic goals. Meeting the minimum raise would trigger its application to graduate from the JSE Junior Market to the Main Market, having exceeded the Junior Market’s $500-million share capital limit. This graduation forms a key step in Tropical Battery’s plan to list on the Nasdaq within three to five years.