Key Insurance Limited has launched a renounceable rights issue with the aim of raising equity funding of approximately J$670 million.
The company said in an announcement today, that it is by offering existing shareholders the right to subscribe for additional shares in the Company, in proportion to their existing stockholdings.
Under the rights issue new ordinary shares in Key have been provisionally allotted to the company’s existing ordinary stockholders in the proportion of 259 new ordinary shares for every 500 existing ordinary stock units held by the stockholder, at a subscription price of J$3.50 per share.
The offer of shares is renounceable, meaning that existing Key shareholders can assign their rights to these shares, wholly or in part, to others, whether they are shareholders in the company or not.
The company indicates that excess shares will be made available to Key shareholders who have indicated that they wish to acquire more shares than their allotment.
The rights issue is scheduled to open on December 23, 2020 and will close on January 11, 2021. The last opportunity for Key shareholders to renounce their rights, wholly or in part, is January 2, 2021.
The share offer is being underwritten by GK Capital Management Limited.
Chairman of Key Insurance, GK Group CEO Don Wehby explained, “The capital the rights issue will raise will be critical to the implementation of Key’s vision and strategic plan, which focuses on achieving profitability targets and sustainable long-term growth, which in turn will provide an attractive return on investment to our shareholders.
In March 2020, GK, through its wholly owned subsidiary, GraceKennedy Financial Group Limited, acquired 65 per cent of the share capital of Key.
Wehby said that the rights Issue is one component of the overall strategy implemented by Key’s Board and management team in 2020 geared towards strengthening its capital base to ensure regulatory compliance and future growth.