Acquisition being financed by capital injection or loan funds

Durrant Pate/ Contributor

Innovative Energy Group (IEG), formerly the long-time defunct Ciboney Group,  has bought out its parent company, IEC Energy Company DBA SPECI Limited, based in St Lucia for US$17.74 million (J$2.8 billion).

The parties have entered into an agreement, dated Monday, August 26, 2024, in which IEG has agreed to purchase 100% of its parent company from its owners, thereby obtaining full control over all its assets and liabilities. 

As a result of the acquisition, IEG will become the holding company of a major renewable energy development, engineering, procurement construction and project management operation in the Caribbean with annual revenue now of over J$1.4 billion.

No details have been provided about the sale but what is known by Our Today is that the purchase is being facilitated by capital injection or a loan, considering that IEA doesn’t have sufficient capital on its books to cover the sale.

Poor 2024 audited financial results 

In fact in its audited financial statements for the year ended May 31, 2024, which was released two days ago, IEG saw its losses climb from J$3.71 million in 2023 to almost J$11 million in 2024. The loss per stock unit moved from one to two cents in 2024.

Administrative expenses have also been steadily rising from J$3.71 million in 2023 to J$11.48 million in 2024 likewise liabilities have been heading north, moving from J$10.61 million in 2023 to J$12.06 million in 2024. 

In the latest audit report, the auditors CrichtonMullings & Associates, Chartered Accountant, “drew attention to note 2(d) of the financial statements, which describes the company’s ability to operate as a going concern, as it did not have any operating activity for the financial year. The previous parent company (Ciboney) disposed of its majority shareholding interest in the company during the year and the new majority shareholder intends (IEC) to resume operation of the company in the future. Our opinion is not modified in respect of this matter.”

Ciboney’s acquisition last year by IEC Energy Company DBA SPECI resulted in the company undergoing a name change to IEG.