Micro-Financing Solutions Limited has amended its take-over offer circular

The board of listed Jamaican venture capital company, SSL Venture Capital Limited is convening a meeting for next month to vote on the takeover bid received from Micro-Financing Solutions Limited, another Jamaican company.

Micro-Financing Solutions Limited, which is a sub-agent of Lasco Moneygram and Western Union made a take-over bid offer to purchase 100 per cent of SSL Venture Capital on January 17 for some $38 million. This represents one-tenth of the market value of shares in SSL Venture Capital, which is said to be worth $512 million on the stock market.

The stock traded at approximately J$1.00 on the market from J$0.90 at the start of the year. Micro-Financing Solutions Limited, which offers short-term funding solutions to both individuals and micro small and medium size companies, is offering to purchase SSL Venture Capital issued share capital at the price of $0.0948 per ordinary share.

The micro financier, which is based at #2Suite at 2 Trafalgar Road, Kingston 5 reports that further details of its offer will be made public in due course. The principals of SSL Venture Capital told Our Today that a meeting of the board is being convened mainly to vote of the takeover offer.

No done deal as yet

They say the deal is not done yet, arguing that the planned sale is in the preliminary stage of execution. Stocks and Securities Limited (SSL) is the primary shareholder in SSL Venture Capital, owning 79 per cent of the issued shares with 15 per cent being owned by mostly former executive employees and directors of the venture capital outlet and the balance of six per cent equity being owned by the general public.

A takeover bid is governed by the Securities (Take-overs and Mergers) Regulations and the JSE Rules, which have strict confidentiality requirements and penalties for breaches. So, until that process is completed and the regulators sign off, the transaction is not considered completed.

Additionally, the selling company could also reject the offer. It has been reported that SSL Venture Capital Chief Operating Officer Anthony Dunn has disclosed that the offer circular from Micro-Financing Solutions contained “some inconsistencies”.

As such, the financial and equities regulatory body, the Financial Services Commission has ordered Micro-Financing Solutions to revise its offer circular, which has been done and the takeover bid circular resubmitted to the FSC. Once the FSC reviews, they have about 30 days to issue a ‘No Objection’ letter.

Take over process outlined

Following receipt of the offer, which is subject to regulatory review and approval, the SSLVC Board will deliberate and present its recommendation to the SSL board through a Directors Circular for final review of acceptance or rejection. Ultimately the board of SSL Venture Capital will determine if they sell or not.

SSL Venture Capital was formed in 2018 by Mark Croskery, the then CEO of SSL Jamaica. SSL Venture Capital was listed on the Jamaica Stock Exchange in August 2018, following a reverse takeover of failed music publishing company, C2W.

As at June 30, 2021, SSL Venture Capital had accumulated deficit of J$123.4 million in comparison to $222.5 million in 2020. In addition, at June 30, 2021, the group’s current liabilities exceeded its current assets by $73.2 million coming from $18.3 million in 2020.