With their additional public offering (APO) being suspended following the onset of COVID-19, 10-year-old St Lucian-based outfit Proven Investments Limited (PIL) has decided to chart a different path as the business environment evolves daily due to the current impediments posed by the pandemic.
Speaking at their virtual annual general meeting yesterday, co-founder, president and chief executive officer of Proven Management Limited, Chris Williams, outlined the current direction of the company and measures PIL implemented to safeguard their portfolio companies.
“For the first quarter, our main focus was to stay alive, make sure all our entities were on their feet and would have been able to survive. We were focused on making sure everyone was safe and managing this crisis,” Williams told shareholders.
The company’s first quarter performance saw net profit attributable to shareholders down by 42 per cent to US$1.41 million mainly due to Access Financial Services not being consolidated and some subsidiaries taking for the period up to June 30. As a result, the company’s dividend was cut from US$0.0028 to $0.0013 for the quarter. In spite of this, the company’s share price has managed to recover to pre-pandemic levels.
“We remain hopeful and optimistic that we will be able to execute the APO. We think that we will be able to do so in the next 24 months.”– Chief executive officer of Proven Management Limited, Chris Williams
PIL has become the second company to delay the timing of their APO following Panjam Investments Limited, which secured shareholder approval but is observing the current environment before making a decision.
This comes after brokerage firm Barita Investments Limited’s APO was successfully oversubscribed past the $9 billion mark with details on the upsize to be released soon.
Despite this inability to secure the US$77 million APO funding, Williams indicated that PIL has enough resources on hand to execute any potential deals which may arise during the period until the APO is executed.
“We were not able to execute the APO as we were right in the eye of the storm when we launched it. However, the APO is not off the table and the timing of the APO is being monitored very closely. We remain hopeful and optimistic that we will be able to execute the APO. We think that we will be able to do so in the next 24 months.
“PIL has about US$40 million in liquid assets and are held primarily in tradable fixed income securities. Secondly, we have about another US$30 million of credit lines that are in place that we can access if we need funding for one or more of our new projects or acquisitions. If the needs are greater than the needs of those two sources, we have our subsidiaries and associates that are in a strong cash position that can step up and take equity stake in one or two of these entities until PIL is able to execute its APO.”
When questioned about the prior deals which were negotiated, Williams revealed that new negotiations have started based on the price adjustments which didn’t satisfy the vendor of the deal.
Although most of PIL’s subsidiaries and associates remained stable throughout the first quarter, BOSLIL Bank was given a US$2-million equity injection to avoid a regulatory breach amid the collapse in asset prices during April.
“The move was defensive and it was from credit exposure but not loan exposure relating to bonds, fixed income and credit. The balance sheet of BOSLIL doesn’t have any material loans. It is primarily a tradable securities balance sheet and it was because at the time the tradable securities had expected credit losses which were significant. That position has improved and in fact has rebounded significantly since then,” Williams informed.
The company’s real estate projects have also been impacted heavily by COVID-19, which has put their newest project Via on Braemar Avenue on a lag of about four weeks.
The current travel restrictions have also resulted in the Chinese team who are to work on the project being stuck in China at the moment. This has even led to the formation of a ‘bubble’ with certain workers to ensure protocols are followed and there isn’t a potential outbreak.
However, their César project in Mandeville, has restarted mainly in part to the fact that the parish hasn’t seen a major spike in COVID-19 cases.