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Derrimon shareholders approve J$4.8-billion APO

The way is now clear for Derrimon Trading Limited to go to the equities market with another public offering (APO) of shares to raise what is believed to be as much as $4.8 billion.

This following last Friday’s (September 25) approval by shareholders of four resolutions at the company’s annual general meeting (AGM) held on September 25, 2020 at Knutsford Court Hotel in Kingston.

The resolution authorises the company’s board and management to “issue up to 1.8 billion ordinary shares by way of an offer for subscription to the public pursuant to a prospectus (herein an additional public offering) in lieu of a rights issue to existing stockholders”.

At the current trading rate of Derrimon stocks at $2.70 and without any discount, 1.8 million shares would fetch $4.86 billion.

Shareholders have also mandated the board and management to determine, in their discretion, any terms and conditions relating to the APO. Any pre-emption rights to which the existing stockholders may be entitled have been “disapplied” for the purposes of the APO, based on a resolution approved by shareholders.

The proceeds of the fund-raising event will be used for expansion capital and to write down debt. The APO is expected to hit the market sometime in late October to early November, with the prospectus being published within the next two to three weeks.

Derrimon first went to the equities market back in December 2013 with an initial public offering, raising $150 million. Speaking with the Jamaica Observer recently, Derrimon Chairman and Chief Executive Officer Derrick Cotterell expressed confidence that the APO will be as successful as its IPO, which was closed three minutes after opening on Monday, December 2, 2013.

Back then the company offered 73.33 million shares at a price of $2.05 per share.

DERRIMON’s JUST-RELEASED 2019-2020 FINANCIALS

In its recently released 2019-2020 annual report, Derrimon reported growth across all subsidiaries and ultimately the group realised a 36 per cent increase in revenue over the prior year. This resulted in profit before tax growing by 23 per cent and a record net profit of $303 million for the group.

Gross operating revenue at the end of December 31, 2019 was $11.638 billion, up by $2.878 billion or 32.86 per cent from the $8.759 billion reported for the similar 2018 comparative period.

The distribution portfolio accounted for $6.459 billion, representing a year-over-year growth of $2.63 billion or 68.53 per cent while the retail division accounted for $5.18 billion, which was $253 million or 5.2 per cent over that generated for the similar period in 2018.

–Durrant Pate