THE National Insurance Fund (NIF) took up more than two-thirds of the shares issued in Tropical Battery Company Limited’s 2025 additional public offering (APO), according to disclosures, as investor demand softened during the offer period after revisions to previously reported financial results.

The NIF accounted for 71.78 per cent of the shares taken up in the APO, investing about $500 million of the $696.6 million ultimately raised. The offer closed well short of its original $1.79-billion target, but enabled Tropical to complete the transaction and proceed with its transition from the Jamaica Stock Exchange Junior Market to the Main Market in August 2025.

Tropical launched the APO in May as part of a broader balance sheet strategy following its acquisition of US-based Rose Electronics Distributing Company LLC, targeting $1.79 billion primarily to support debt reduction and liquidity.

Investor appetite weakened during the offer period after the company revised previously published financial information, prompting closer scrutiny of its leverage and earnings capacity, with borrowings running into the billions of dollars and annual finance costs exceeding $580 million, according to the audited accounts.

That erosion of confidence became visible in July, when NCB Capital Markets Limited withdrew its recommendation on the offer, advising clients that its earlier valuation assessment was no longer valid following changes to the reported figures for the December 2024 period. The broker also told clients it was processing refunds unless they opted to proceed with their applications. The decision came while the APO was still open and was followed by two extensions to the subscription deadline as Tropical sought to complete the raise.

The company later formally restated its 2024 financial statements in its audited results issued in February 2026, confirming that material acquisition-related events had not been fully reflected in the original comparatives. The restatement altered previously reported profitability and balance sheet metrics and placed Tropical alongside Productive Business Solutions Limited and Jamaica Broilers Group as one of several major listed Jamaican companies in recent years to revise prior financial statements following acquisitions or complex transactions.

The restatement shifted the group’s originally reported 2024 profit of $20 million to a restated net loss of $121.4 million, reflecting unrecorded interest expense on a US$13-million loan and the omission of $89.73 million in share-based payment transactions in the original financials.

Measured against the restated 2024 result, Tropical returned to profit in the year ended September 30, 2025, posting net earnings of $59.7 million. Cash generation also improved, with operating cash flow turning positive at $60.1 million, compared with an outflow of $377.9 million the year before, while the company moved back into a net current asset position.

The recovery was reflected in higher operating earnings. Gross operating revenue rose 14.6 per cent to $6.44 billion, and operating profit increased to $527 million. EBITDA climbed to $785.1 million, aided in part by a $235.3 million non-cash gain linked to the remeasurement of contingent consideration arising from the Rose acquisition.

However, the audited accounts also underscore continuing balance sheet pressure. Net finance costs totalled $580.6 million, absorbing a large share of operating gains. Goodwill stood at $2.97 billion, largely related to the Rose Batteries acquisition and almost twice shareholders’ equity, and was identified by auditors as the key audit matter because of the sensitivity of valuations to future cash flow assumptions and discount rates.

Following the APO, Tropical said it is prioritising refinancing and debt restructuring over expansion as it seeks to lower financing costs after its move to the Main Market.

For the NIF, the investment in Tropical was not a one-off. The fund also anchored the APO by NCB Financial Group and has taken positions in other large equity raises. As at September 30, 2025 it held 15.35 per cent of Tropical Battery’s issued share capital, making it the company’s second-largest shareholder after its parent, Dai Diverze (Jamaica) Limited.

Tropical now faces the task of sustaining its return to profit while reducing leverage after a capital raise that relied heavily on institutional participation.