KINGSTON, Jamaica, Monday, January 13, 2020 (CMC) – The Jamaica government has welcomed the decision of First Rock Capital Holdings Limited to seek to raise J$1.6 billion from its Initial Public Offering (IPO), which opened, today, as being indicative of its confidence in the local economy.
The company began operating in March 2019, after raising about US$16 million in debt capital from institutional and accredited high net-worth investors’ funds, via private placement. The IPO runs until January 31.
Industry, Commerce, Agriculture and Fisheries Minister, Audley Shaw, says the decision by the principals of First Rock Capital Holdings Limited and, by extension, that of other interests, across the society, has been, and continues to be, spurred, to a great extent, by the outcomes of several key macroeconomic indicators.
Shaw explained that this is the extent of “unprecedented” growth being recorded; increased employment and a commensurate reduction in unemployment to a record low 7.8 per cent; and significant debt reduction, down from 145 percent of gross domestic product (GDP) to 93 percent.
An estimated 106,083,332 shares are being offered and these include 51,916,666 reserved shares, with the principals having the option to upsize the offer by an additional 53,041,666 shares, in the event of oversubscription.
Sagicor Investments will act as the arranger and lead broker, with Sygnus Capital the preferred co-arranger.
“The offer price of US$0.12 to the general public is fairly priced, based on our estimated value of the company. As such, investors could consider taking a stake in this company, however, at a fair value price the potential for upside is considered low,” Sagicor Investments said in its assessment.
Shaw also praised First Rock on its involvement in real estate, which he noted, is one of the leading growth-inducing sectors, and described the firm’s IPO investment opportunity as a “source of inspiration”.
“With all of the problems that we have, there are far more opportunities than [challenges]. We can create wealth in Jamaica… and the more wealth we create is the less crime we will have; and the more human development that we enhance… is the less problems that we will have,” he said.
Shaw pointed out that the extent to which confidence in the economy continues to grow, is evident in the feedback already forthcoming to the IPO, noting however, that while “tremendous and new goals” are being achieved in the economy, there is need for higher levels of productivity to sustain and heighten these.
“We have to improve the productivity of the country, so that our workers can get a better pay cheque that can enhance their own wealth in a [meaningful] way,” he said.
First Rock said it will use the funds raised from the IPO to acquire several additional properties in Jamaica and the region. The firm already owns properties, across the island, in Costa Rica and the United States.
The enterprise recently recorded a US$218,000 net profit from six months of operations.