DEQUITY Capital Management Limited, headed by Kadeen Mairs, will be issuing refunds to investors who participated in its initial public offering (IPO) which required a minimum $500 million for it to be deemed successful.

The IPO, which was launched on November 13, saw the private equity firm pushing to raise $657.50 million (US$4.07 million) which was earmarked for repaying $626 million in debt and to cover its listing expenses. The offer, which officially opened on November 27 and closed on December 18, did not meet the minimum target, leaving Dequity unable to list on the Jamaica Stock Exchange’s (JSE) Main Market. The offer was priced at $1 per share.

“We formally advise that while the offer has now closed, Dequity Capital Management Limited has taken the decision not to proceed with the IPO, as the minimum subscription level outlined in the prospectus was not achieved by the closing date,” noted lead broker VM Wealth Management Limited (VMWM) in a December 24 email to investors.

VM Wealth Management indicated that the refunds will be processed within 10 business days of the closing date, or before January 6. VM Wealth Management added, “While this outcome is disappointing, it reflects a prudent and responsible approach that protects investors and supports confidence in the market.”

The last IPO to not meet the minimum threshold was Caribbean Energy Finance Company Limited’s May 2015 IPO. The company did not meet the $231-million minimum subscription threshold relative to its $452-million target. The company was aiming to list on the Junior Market under the guidance of lead broker MVL Stockbrokers Limited.

Exponential Holdings Limited also fell short in December 2013. The start-up company attempted to go public by raising $470 million at $2 per share, but the offer failed to meet the minimum subscription threshold of $300 million. It had planned to list on the Junior Market. Mayberry Investments Limited was the lead broker.

With the IPO now off the table, Dequity faces the challenge of managing its existing obligations, including a $600-million bond that matures in February 2027. That bond is secured by 460 million ordinary shares in Dolla Financial Services Limited. Dequity holds a total of 500 million ordinary shares in Dolla, representing a 20 per cent stake in the financial services firm.

Dolla’s own public bond offer is scheduled to close on December 31. However the bond, which has a $1-billion target, has not seen any announcement that the offer will be upsized to a maximum target of $1.5 billion. The offer opened on October 23 and was scheduled to close on November 13 but was extended due to Hurricane Melissa. Mayberry Investments is the lead broker for this offer.