Private credit investment company Sygnus Credit Investments Limited (SCI) plans to raise $1.2 billion from its initial public offering (IPO) on May 2 to 18.
A specialty company dedicated to providing non-traditional financing to medium-sized firms across the wider Caribbean region, Sygnus is inviting prospective investors to subscribe for 90,909,091 shares at US$0.11 per US$ share and $13.72 per J$ share, with 40,000,000 shares being held for reserve share applicants.
Reserved shares will be available for subscription by existing shareholders and Sygnus employees at the subscription price of US$0.105 per US$ Share or $13.10 per J$ share. Sagicor Investments Jamaica is the lead broker and co-arranger of this transaction, while JN Fund Managers will serve as co-brokers. Sagicor Jamaica Investments will take up to 45,454,545 shares or US$5,000,000 equivalent.
Sygnus intends to use the IPO proceeds to grow its investment portfolio and cover related IPO and listing expenses. Currently the company invests in firms with operational revenue US$5 million and US$25 million across the manufacturing, distribution, financial services, energy, real estate, transportation, infrastructure and business services sectors.
“We are very excited about this IPO and the opportunity for every Jamaican to participate in the lucrative private credit investment market. This is a win-win as investors can support and finance the growth of medium-sized firms in Jamaica and the Caribbean while realising attractive risk-adjusted returns,” said co-Founder and chief executive officer of Sygnus Capital, Berisford Grey.
In a recent interview with the Jamaica Observer, Chief Financial Officer Jason Morris outlined the high demand for customised credit investments and financing as the motivating factor for the decision to launch the IPO. The company hopes to raise US$10 million, if fully subscribed, to add to its significant investment pipeline of US$31.4 million.
Launched in 2017, Sygnus' vision is to unlock capital for medium-sized firms in the Caribbean, whilst rewarding shareholders with exposure to a new asset class in the form of private credit investment. In the second half of 2017, the company raised US$16 million in equity to kick-start this drive for regional business growth, and for the first six months of operation, Sygnus generated net profit of US$ 661,000 with an average yield on portfolio companies of 10.3 per cent.
“Our current IPO will raise additional capital for continued investment in high-growth sectors, further rewarding investors with consistent cash flow via quarterly dividend payments,” Grey said.
The company raised US$16 million in equity in 2017.
The company noted that non-traditional forms of credit are more customised and flexible than traditional financing. Consequently, Sygnus offers an alternative channel through which medium-sized firms — which are typically underserved by traditional forms of financing — can access capital to drive their expansion and growth. At the first financial year end, SCI intends to pay out up to 85 per cent of generated earnings from investments as quarterly dividends.
The offer which is to be made the Jamaica Stock Exchange is slated to open at 9:00 am on Wednesday, May 2, 2018 and will close at 4:30 pm on Monday, May 16, 2018.
SCI's investment is managed and advised by Sygnus Capital Management Ltd and Sygnus Capital Ltd — both subsidiaries of the Sygnus Capital Group Ltd.
The investment prospectus is available on the company's website at www.sygnusgroup.com.