Equity markets roar for APOs – basis of allotment announced

Although equity markets are far from their all-time highs, investors demand for equity investments hasn’t waned as Derrimon Trading Limited (DTL) and PROVEN Investments Limited’s (PIL) multi-billion additional public offerings (APO) were both heavily oversubscribed.

With Barita Investments Limited and Sygnus Credit Investments Limited paving the road for further equity offers, Derrimon has led the way for a wave of APO’s in 2021 as their APO was 2.06 times oversubscribed according to the basis of allotment on the Jamaica Stock Exchange’s (JSE) website this week.

This 2.06 times oversubscription was with respect to the 1.5 billion shares that was originally valued at $3.5 billion which meant that the offer got $7.21 billion in subscriptions. As a result of this heavy demand, DTL upsized the offer by 301 million units, which meant that 1.8 billion units will be issued for a gross consideration of $4.076 billion compared to the $4.22 billion listed in the prospectus.

“We are extremely pleased with the results of the Derrimon Trading Ltd APO being 2.06x oversubscribed. This speaks volumes as it relates to the confidence and support of our new and existing shareholders, and we are also happy that this APO afforded the opportunity for our hard-working employees to also participate in owning a part of the company that they have helped to grow,” said Chief Financial Officer Ian Kelly on the interest by investors on the APO.

Only key investors were given 100 per cent of their allocation with Barita clients pool, existing shareholders or Derrimon team members and the general public receiving 83.72, 51.63 and 39.15 per cent, respectively, of what was applied for in the APO.

PIL also garnered a similar level of oversubscription with the APO garnering US$34.5 million ($5.2 billion) in subscriptions from 4,148 applications. This was US $4.3 million above the US $30.2 million target set by the investment holding company in its second APO following the cancelled March 2020 offer.

The APO saw a 75 per cent uptake within the first three days of the original US$20 million pre-upsize target which even led to the company closing off USD share applications a day before the offer closed.

Existing shareholders and members of the public received the full allotment of what they applied for while key investors who were putting in a minimum of US$500,000 ($75 million) will be prorated to the tune of 70.75 per cent of what they applied to receive. The key investor pool received a 51.22 per cent oversubscription in the offer which had a maximum of 134,124,037 shares available.

DTL & PIL will apply to the JSE to list the new shares on the exchange which should be available for trading in a few weeks. Although PIL has announced its acquisitions in Barbados, Kelly believes that the APO will kick off the Derrimon 2.0 vision which has started with the company’s New York-based acquisitions valued between US$8.9 – $9.1 million.

“Now that the APO has been successfully completed, we can continue to channel our time and these new resources into expanding our brands further across the region and into the Caribbean Diaspora worldwide while improving our efficiency and digital capacity as we continue ‘feeding families and fuelling change’.

“We would like to use this opportunity to thank our lead broker, Barita Investments Limited and to also welcome our new shareholders to the Derrimon family. We look forward to the listing of these new ordinary shares,” Kelly said.