Jamaican investment company, Cornerstone Financial Holding has purchased an additional 15 million shares in its publicly held subsidiary, Barita Investments.

The Jamaican investment holding company is the single largest shareholder in Barita, which is the oldest stock brokerage house in the country. The shares were bought on the floor of the Jamaica Stock Exchange (JSE) on August 16, 2021.

Of the 15 million shares acquired by Cornerstone, just over 12 million shares were sold by a company named Barita Finance, according to a report of the trading on the JSE for August, seen by the Trinidad Express.

Barita Finance was incorporated as an offshore company in St Lucia on November 29, 2018 by Hewanorra Corporate Services. Information on the shareholders and directors of offshore companies in St Lucia is not available to the public.

Cornerstone purchased 77.4 per cent of the 19,379,374 shares traded on August 16. Trinidad Express also reports that in addition to Barita Finance selling a block of shares on August 16, a director of the company as well as the corporate secretary of Cornerstone United Holdings Jamaica also sold shares.

These transactions were done days before the Additional Public Offer (APO) of shares in the Jamaican investment and brokerage, which is of material interest for regulators.

Barita APO opens next week

The APO is due to open on September 6 and close on September 21. The prospectus for the APO indicates that Cornerstone Financial owned 806,566,479 shares in Barita Investments, constituting a 74.30 per cent stake, as at June 28, 2021.

The purchase of the 15 million shares on August 16 takes Cornerstone Financial to a shareholding of 821,566,479 or 75.67 per cent of Barita Investments. In the APO, Barita Investments is offering, in the first instance, 125 million new ordinary shares to investors at a price of J$80 per share, potentially raising J$10 billion (or an estimated US$66 million).

However, the directors of Barita Investment have the right to upsize the APO to 187.5 million shares at J$80, which would raise J$15 billion or US$100 million. Of the 125 million new shares available in the APO, in the first instance, 112.5 million are reserved and 12.5 million are non-reserved shares.

The reserved shares are available to Barita clients, Cornerstone, existing shareholders and key investors, who would be entitled to 90 per cent of the APO shares.

If the APO is upsized to 187.5 million shares, Cornerstone and the key investors would be entitled to 140.625 million shares, or 75 per cent of the offering. Existing shareholders and clients of Barita Investments would then be entitled to purchase an additional 28.125 million shares or 15 per cent of the upsized offer.