IPO opens tomorrow closing June 10

Durrant Pate/Contributor

The arrangers for microfinance company, Dolla Financial Services’ J$500-million initial public offer (IPO) of shares will spell out more details about the equity raise this evening (May 26).

VM Wealth Management, which is the lead arranger for the IPO, has called an investor briefing for 5:00 pm at its Group Human Resource Training room at 73-75 Half-Way Tree Road, Kingston 10 to release more details on the equity offer.

Dolla Financial CEO Kadeen Mairs and VM Wealth Management CEO Rezworth Burchenson will be the main presenters at the briefing.

The J$500 million being sought is the maximum equity raise allowed for new listings for junior market companies. The IPO is priced at $1 per share with the proceeds being used to fund acquisitions and other expansion of the business, particularly in Guyana, where it opened an office last year and plans for establishing a presence in two other Caribbean territories.

Use of proceeds from IPO

In addition, the proceeds will be used to settle debt owed to the selling shareholders, First Rock Private Equity and DeQuity Capital Management as well as expanding Dolla’s loan portfolio regionally through acquisitions. A portion of the proceeds will be used for organic growth while strengthening the micro financer’s capital base.

Dolla Financial now has an equity base of J$373 million. Half of the 500 million shares available for subscription are being sold by First Rock Private Equity, which owns 75 per cent and DeQuity Capital Management, owing 25 per cent.

Dolla Financial Chairman Ryan Reid is one of the principal shareholders in First Rock Private Equity and Mairs is the principal behind DeQuity. If the IPO is successful, First Rock’s equity holding in Dolla Financial will be diluted to 60 per cent, while DeQuity’s stake will fall to 20 per cent.

Dolla Financial currently operates in Jamaica and Guyana. The company has eight branches, one of which is in Guyana. As part of the expansion process, Dolla Financial is now in the process of applying for money lending licences in two countries, one of which is The Bahamas.

Dolla Financial’s listing on the stock market has been a goal since 2017 but now after two rounds of debt financing and a restructuring, the company is ready to make its sojourn on the junior market of the Jamaica Stock Exchange.

Dolla Financial began operations in 2014, first with remittance, bill payments and cambio divisions before departing those operations and redeploying capital into microcredit services as its new core business.

Some 48 per cent of its revenue comes from the loan product, Dolla Elite, which is targeted at entrepreneurs and high net worth clients.

For the first quarter ending March 2022, Dolla Financial made a profit of J$66 million on revenue of J$141 million.

Assets have grown to almost J$1 billion, including a loan portfolio of J$870 million, net of provisions for bad loans.

READ: Dolla Financial aims to raise J$500M from IPO