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Barita heads to the market for more funding

Barita Investments Limited (BIL) is headed to the market for more funds after two rights issues and major acquisitions made in 2019.

Barita Chairman Mark Myers

This time, it is an Additional Public Offer (APO) of ordinary shares which is on the cards.

On Friday, the company advised the market via a Jamaica Stock Exchange (JSE) notice that at meeting of the Board of Directors will be held on Friday, June 12, 2020. “Directors will consider, and if thought fit, recommend a resolution for an Additional Public Offer (APO) of ordinary shares in the capital of the Company, to be tabled for approval at the upcoming Annual General Meeting of the shareholders.”

BIL, which offers wealth management, brokerage and investment banking services, raised $3.5 billion in its second rights issue in third quarter 2020.

The company issued 11 new shares per 100 units held by existing shareholders at a price of $45 per unit which was a near 50 per cent discount on trading price of $72.23 at the top of September.

The value of Barita’s shares increased exponentially since its September 2018 takeover last September by private equity firm Cornerstone Investments.

In January 2019, the company raised $4 billion in an initial rights issue.
The company released end of year results with total comprehensive income of 1.94 billion, up from $686 million at year end September 2019.

Barita acquired a five per cent stake ) in Proven, overtaking Proven’ in 2019 to become the largest holder of shares in the investment company.

Net profit, despite increased expenses, rose to $1.7 billion, up from $ 363 million the year before. Operating income tripled to $3.9 billion, up from $1.3 billion the year before.

For the six months ended March 31, 2020 the company posted net profits of $1.01 billion, up 95. 9 per cent over March 31, 2019.

Net operating revenue for the six months was $2.3 billion.

Company Chairman Mark Myers said in comments attached to the six month results that the company was well placed to navigate the “headwinds” being presented by the impact of the corona virus.

He noted that as at March 2020, the group held cash and near cash of $17.3 billion, which was 21 per cent improved over the year prior, and comprising 36 per cent of total assets held.

The company indicates that it is moving to diversifying revenue from net interest income to non-interest income. Since launching its  investment banking unit , last year, BIL has seen its fees & commission income increase, also buttressed by a new stake in investment company Proven Investments Limited.

Close to year end 2019, Barita acquired a five per cent stake valued at US$9,864,233.39 (J$1.34 billion) in Proven, overtaking Proven’s founding partner Peter Bunting as the largest holder of shares in the investment company.

The transaction valued Proven at US$197.28 million (J$26.8 billion).

Barita Group is today made up of Barita Investments Limited and its subsidiary Barita Unit Trusts Management Company Limited. The company was founded by Rita Humphries-Lewin in 1977. 

In August 2018, Cornerstone Investment Holdings acquired majority shares in the company.