Would a bank account have been better? The AAJ share buySunday, July 25, 2021
BY AVIA COLLINDER
If the Airports Authority of Jamaica (AAJ) and its subsidiary had parked US$3 million cash in a bank account instead of buying a stake in First Rock Capital Holdings Limited, it would have come out ahead as at today, July 23, when the US dollar is valued at US$154.
The AAJ, the fourth-largest shareholder in First Rock Capital Limited is reportedly trying to offload its stake in the company, following criticism from Jamaican parliamentarians who assert that the share buy was a breach of the investment policy of the government agency.
Its holdings, which today amounts to 5 per cent of the investment company, comprises 14,259,000 units. At today's market value, the shares are worth $14.94 per unit or $213.03 million in total. The stock has appreciated 19 per cent in the last 12 months.
However, the AAJ paid US $3 million for its shares, pre-IPO, in two tranches. That amount of cash, today, would be worth $462 million, plus interest, in a US-dollar bank account, if converted to Jamaican dollars.
First Rock, the investment company, has a total market capitalisation of $571,358,016.13 on the Jamaican-dollar market. The AAJ and its subsidiary, NMIA Airports Limited, are said to have breached government regulations in their $443-million investment in First Rock.
Under the 2017 Public Bodies Management and Accountability Act (PBMAA), public bodies must get the finance ministry's permission before investing in a private company that is not listed on the Jamaica Stock Exchange.
Parliamentarians also said the share buy was in breach of the AAJ's own investment policy which does not permit investment in start-ups. First Rock Capital started operations on March 15, 2019 and listed on the Jamaica Stock Exchange (JSE) in February 2020.
Now you can read the Jamaica Observer ePaper anytime, anywhere. The Jamaica Observer ePaper is available to you at home or at work, and is the same edition as the printed copy available at https://bit.ly/epaper-login