Having pushed back its additional public offer (APO) for nine months, PROVEN Investments Limited is coming back to the equities market on January 8, 2021.
PROVEN’s long-awaited APO will be for 89.41 million shares, set to rake in $2.93 billion and if the directors exercise the option to upsize the offer by a further 44.7 million shares to a maximum of 134.12 million new ordinary shares, the company could fetch $4.4 billion.
The offer price is US$0.23/J$33.50 per share for the general public and a discounted price of US$0.225/J$32.80 per share for existing shareholders and US$0.2200/J$32.10 per share for key investors.
The APO closes three weeks later on January 29. The APO was opened to the public in March 2020 but the company decided to suspend the offering due to the onset of the COVID-19 pandemic.
Upon the issue of the new ordinary shares, PROVEN intends to have the shares listed on the USD market and the J$ main market of the Jamaica Stock Exchange (JSE) and will apply for such listing promptly after the close of the public offer. It is estimated that the new shares could be listed by February 26, 2021.
PROVEN is a private equity firm, whose primary strategy is to acquire, grow and extract value from its portfolio of investments with its fundamental objective being to continue to provide above-average returns over the medium to long term for its investors.
Use of APO proceeds
Consistent with its mission over the last 10 years of operations, the Christopher Williams-led PROVEN intends to use the net proceeds of the APO to strengthen its capital base, which will enable the investment outfit to pursue and execute investment opportunities that it determines offer the best prospects of meeting targets and satisfying all of its investment criteria.
In his message accompanying the prospectus, which was released yesterday, PROVEN Chairman Hugh Hart remarked, “We are more likely to seek investments in our core areas of expertise, such as financial services, we remain alert to take advantages of opportunities as they arise and as we have in the past will continue to regularly consider investments in the real sector. We are therefore pleased to extend this invitation to you, whether for the first time, or as an existing shareholder to participate in this exciting journey of creating long-term value for our investors and playing our role in growing the economies of the jurisdictions in which we invest.”
The prospectus indicated that PROVEN currently has an extensive pipeline of investments spanning three primary business strategies, which are either under review or at various stages of execution. The net proceeds of the APO will give the investment house the ability to pursue these and other opportunities while ensuring that the company maintains a balanced capital structure.
Hart pointed out that PROVEN has been fortunate to have weathered the global pandemic much better than feared with strong indications that the timing is again right for the company to expand its shareholder base and give as wide a group of equity investors as is possible the opportunity to participate in the future of the company via this APO.
PROVEN’s equity raising journey
The PROVEN chairman chronicled the company’s equity raising journey, which started in 2010 with its successful raising of US$20 million by way of a private placement of ordinary shares. This private placement was one of the largest private or public US Dollar equity offerings in the history of Jamaica’s capital market at that time.
Later that year, PROVEN raised an additional US$9.7 million by a rights issue of additional ordinary shares. In July 2011, these ordinary shares were listed as the first listed ordinary shares on the USD market of the JSE. In addition Proven subsequently raised additional funding through rights issues of ordinary shares, preference share issues and debt issues.
The capital raised to date has allowed the company to continue its expansion that has seen returns on both healthy dividends and capital appreciation to shareholders through a focused, risk-based approach to investing and managing capital.
Hart stated, “The benefit of pursuing this approach has been borne out by the extent to which we have been able to overcome the economic storm triggered by the global COVID-19 pandemic.”
From a single entity at inception in 2010, Proven now hold a substantial portfolio of investments in Jamaica, the Cayman Islands, St. Lucia and beyond—including holdings in subsidiaries and associated companies, which generated net profit attributable to shareholders of US$29.98 million as at the last financial year ending March 31, 2020.
Since PROVEN commenced operations in February 2010, it has raised over US$67 million.
Solid core growth for March 2020 financial year
PROVEN registered a strong performance for the financial year ended March 31, 2020. Over the period, emphasis was placed on executing growth strategies across all business lines. However, the realised results were offset by adverse market conditions stemming from the effects of the COVID-19 pandemic in the final quarter.
Net profit attributable to owners of the company (NPAO) for the year amounted to US$29.98 million, while NPAO adjusted for the extraordinary gain and associated charges amounted to US$11.04 million, which represents a 61.26 per cent increase in core earnings from the US$6.85 million earned in the previous year.
PROVEN experienced robust organic growth resulting from the disciplined execution of its private equity strategy which focused on optimising and extracting value created by its portfolio assets through ongoing expansion, management and rebalancing of its holdings to deliver above-average returns to its shareholders.
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