Business
JAM | Nov 28, 2022

Early closure of Regency Petroleum IPO

/ Our Today

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IPO over-subscribed one day after opening

Regency Petroleum

Durrant Pate/Contributor

Regency Petroleum Company’s (RPL) initial public offer (IPO) of shares has been closed two weeks ahead of its scheduled December 8 end.

The IPO of 287,157,354 ordinary shares, priced at J$1.00 per share, opened November 24 and closed the following day. GK Capital Management Limited (GKCM), lead broker, has advised of the early closure.

RPL is a licensed petroleum bulk distributor in Jamaica. If successful, the IPO shares will be listed on the junior market of the Jamaica Stock Exchange.

Proceeds of IPO in detail

The proceeds of the IPO will be used to settle existing debt and expand the business. Just over 115 million shares are open to the general public, 171.9 million reserved for priority applications and subscription and GK Investment Limited with 100,000,000 shares reserved for priority applicants.

The remaining 71,961,000 reserved shares represent associate loan conversion, RPL employees and strategic partners.

Ryan Strachan, vice president of investor relations at GKCM/

Ryan Strachan, vice president of investor relations at GKCM, said that “RPL hopes to raise just over J$287 million from the share offering and plans to use approximately J$160 million of the proceeds to liquidate its total existing indebtedness. This move should assist the company in optimising its capital structure for further growth and enhance free cash flow”.

Approximately J$75 million of the funds raised are slated to go towards completing RPL’s Paradise Pen Service Station in Westmoreland. This new service station will incorporate modern technology and equipment and feature a state-of-the-art convenience store.

RPL’s planned Paradise Service Station in Westmoreland.

Construction is expected to be completed by the end of 2022 and the location is expected to be open to the public by the end of the first quarter of 2023. The remaining proceeds from the IPO will be allocated towards expanding RPL’s Liquefied Petroleum Gas (LPG) operations by purchasing additional cylinders to satisfy growing demand.

Dr Andre Foote, chairman of Regency Petroleum Co Limited.

With RPL also working towards a modern service station in Negril, Westmoreland, Dr Andre Foote, chairman of the board of directors, made the point that the company’s bold innovation and decision-making will continue to set it apart and see it through achieving its goals.

RPL supplies bulk LPG to established bakeries, restaurants, and hotels islandwide, and has seen consistent growth of this business segment amid increasing demand. The expansion of its LPG operations will also allow for a wider customer base in Kingston and St Andrew.

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