Durrant Pate/ Contributor

IEC Energy Limited out of St Lucia, which is the majority shareholder of Ciboney Group, is making a bid to acquire the remaining equity in the Jamaican company from its existing shareholders.

IEC Energy has issued a take-over bid circular in which it is offering to buy the remaining 28.89 per cent equity, or 152,267,583 ordinary shares for J$0.05 per share. The offer is being made in compliance with the mandatory takeover requirements of the regulations and the code of the Jamaica Stock Exchange (JSE).

Ciboney Group Limited is a company listed on the Main Market of the JSE and has an issued share capital, which currently comprises 546,000,000 stock units. IEC Energy is a holding company/special purpose vehicle incorporated for the purposes of acquiring the majority interest in Ciboney.

This acquisition was executed when it bought 393,732,417 shares or 72.11 per cent of Ciboney on June 29, 2023. These shares were held by government-owned FINSAC, which was the financial bail-out entity formed by the government during Jamaica’s financial sector meltdown in the late 1990s.

Those shares were acquired at the said price of J$0.05 per share. On July 3, 2023 IEC gave notice of a firm intention to make an offer to acquire all the shares held by minority shareholders in accordance with the Securities (Takeovers and Mergers) Regulations and the JSE’s Take-over and Mergers Rules.

Mandatory take-over requirement

Subject to the qualification at Clause 11 of the mandatory takeover requirements of the Regulations and the Code, the offer will take steps to prevent the company from having less than 100 voting shareholders, and prevent the acquisition of no more than 80 per cent of the share capital to prevent the company from being de-listed.

As explained in Section 11 of the take-over bid circular, IEC will not shares that would take its shareholding beyond 80 per cent (436,800,000) of the ordinary voting shares in Ciboney. Thus, the total potential acceptances at J$0.05 per share would result in the total consideration payable being approximately J$2.15 million (for up to 43,067,583 ordinary stock units (7.88%) not currently held by the company.

The offer is open for acceptance by shareholders for a period of 14 days namely from Friday, September 22, 2023, which was the opening date to Friday October 6, 2023, which is closing date, subject, however, to the right of IEC to extend the closing date.

Financial strength to carry out take-over

IEC’s financial ability to carry out this take-over bid has been guaranteed by IEC DBA IEC SPEI Limited (a Jamaican company limited by shares), which is also a subsidiary of Innovative Energy Company Limited. IEC DBA IEC SPEI Limited has instructed First Global Bank to provide a letter of confirmation to the JSE of its ability to carry through the take-over bid.

The IEC Energy was owned by Wiltshire Consulting and Advisory Group Limited and was transferred to IEC, the St Lucia-based holding company on June 30, 2023. IEC was incorporated by Nigel Davy, an entrepreneur and energy professional with over three decades of experience in the energy sector.

He has developed, financed, constructed and operated over 16 co-generation and energy infrastructure projects in the United States, Central America and the Caribbean.