THE principals of venture capital outfit SSL Venture Capital (SSLVC) Limited are seeking to set the record straight regarding plans to offload the company, which remains insolvent.
The Jamaica Stock Exchange (JSE) reported last week that Micro-Financing Solutions Limited on January 17, 2022 made a takeover bid offer to purchase 100 per cent of SSL Venture Capital. Micro-Financing Solutions, which is a sub-agent of Lasco Moneygram and Western Union, is offering to purchase SSLVC's issued share capital at the price of $0.0948 per ordinary share.
Micro-Financing Solutions, which is based in New Kingston, St Andrew, offers short-term funding solutions to both individuals and micro, small and medium-sized companies. Further details of the Micro-Financing Solutions offer will be made public in due course.
However, when contacted by the Jamaica Observer on Tuesday, the principals of SSL Venture Capital say the deal is not done yet, arguing that the planned sale is in the preliminary stage of execution. In fact, the board of the parent company of SSLVC, Stocks and Securities Limited (SSL), has not even met to consider the offer, which was made to it on January 17, 2022.
The Business Observer was informed that a board meeting is scheduled for early next month with the top agenda item being consideration of the takeover offer. SSL is the primary shareholder in SSLVC owning 79 per cent of the issued shares. Former executive employees and directors own 15 per cent while the other 6 per cent of the equity is owned by the general public.
A takeover bid is governed by the Securities (Take-overs and Mergers) Regulations and the JSE Rules, which have strict confidentiality requirements and penalties for breaches. So until that process is completed and the regulators sign off, the transaction is not considered completed.
Additionally, the selling company could also reject the offer.
Anthony Dunn, chief operating officer of SSLVC, disclosed that the offer circular contained “some inconsistencies” with regulatory body the Financial Services Commission (FSC) ordering Micro-Financing Solutions to revise the offer. This has been done and the takeover bid circular submitted to the FSC.
Once the FSC reviews, it has up to 30 days to issue a “No Objection” letter. According to Dunn, following receipt of the offer, which is subject to regulatory review and approval, the SSLVC board will deliberate and present its recommendation to the SSL board through a directors' circular for final review of acceptance or rejection. Ultimately, the board of SSL will determine if the entity is sold or not.
SSLVC was formed in 2018 by Mark Croskery, the then CEO of SSL Jamaica. SSLVC was listed on the Jamaica Stock Exchange in August 2018, following a reverse takeover of failed music publishing company, C2W.
The venture capitalist later acquired equity in Blue Dot, Muse 360, and Bar Central. The aim at the time was to assist fledgling entrepreneurs to access funding to realise their dreams and to introduce these entities to the Junior Market as part of the exit strategy.
Muse 360 Integrated Limited ceased operational activities in August 2019, while Bar Central was shuttered in December 2020 as the novel coronavirus pandemic had a devastating impact on the company's revenues. Shortly after SSLVC started the process of selling its interest in Bluedot Data Intelligence Limited to its founder, Larren Peart.
That transaction was completed earlier this month. Bluedot is a full-service research and data intelligence company dedicated to the collection, mining and analysis of data to inform insights and decision-making.
As at June 30, 2021, SSLVC had accumulated deficit of $123.4 million in comparison to $222.5 million in 2020. In addition, at June 30, 2021 the group's current liabilities exceeded its current assets by $73.2 million, coming from $18.3 million in 2020.