Premature closure due to over-subscription of shares

The initial public offer (IPO) of shares in Jamaican private online learning institution, Edufocal was closed one minute after opening yesterday.

The premature closure was due the fact that the IPO, which was scheduled to be closed on March 17, 2022. The Gordon Swaby-founded and led company got subscription above the just under J$130 million, which was sought through the IPO of 129,689,219 ordinary shares, priced at J$1 per share.

However, the general public only got to buy 80,499,272 million shares, which represented 62 per cent of the IPO, which was allocated in the non-reserved pool of shares. The remaining portion was listed in the reserved pool comprising 35,947,717 million shares or 28 per cent of the IPO went to key strategic partners.

The balance of 13,242,230 or 10 per cent of the IPO went to Roots Financial Group Limited as the lender’s option. Both Roots and Edufocal have agreed that the former will exercised its option under the loan agreement dated March 9, 2021 to convert  J$13.24 million of debt owed by EduFocal into ordinary shares at the IPO, price of J$1.00 per share.

It is the intention of Edufocal to apply to the Board of the Jamaica Stock Exchange (JSE) for the whole of the issued ordinary share capital of the company to be listed on its Junior Market. The net proceeds of the IPO will be used to repay short term loans and invest in product development as well as for expansion.

The current proposed initiatives for expansion including improving platform efficiency, developing a range of quality new products and features, and expansion into new markets including the North American market. Some J$62.44 million will be used towards expansion in new markets including by way of acquisition opportunities.

Among the company’ most recent initiatives is the formation of the EduFocal Academy, which was launched in September 2020. It entails a complete online school experience where we offer a full-day online learning programme, Monday through Friday from 8:15 am. to 2:30 pm.