SSL Ventures offloads REIT business to port partner - Plans acquisition of fintech company

Kingston Wharves has bought out its joint-venture partner Stocks & Securities Limited, or SSL Jamaica, to take full control of a real estate investment trust through which they jointly owned warehousing assets on the port.

The deal valued at US$473,000 ($63.6 million) comes three months after Zachary Harding took over as CEO of SSL Growth Equity Limited (Barbados), or SSL Group, the holding vehicle for the Croskery family-controlled Stocks & Securities firm.

Harding, who succeeded Mark Croskery, the son of SSL founder Hugh Croskery, as CEO in mid-September, says the deal with Kingston Wharves provides SSL with liquidity, and that the company was weeks away from acquiring a fintech business through its listed venture capital subsidiary. In the meantime, the company has dropped plans that preceded Harding to acquire a piece of a radiology venture.

The changes being made form part of a broader plan by Harding to restructure SSL Group into a private equity operation, while maintaining the brokerage business of Stocks & Securities.

“What we are basically doing is looking to sell the entities that are not core to us and acquire businesses that are in the growth stage. The brokerage business is going to be maintained and managed, but the focus is really on expansion through private equity and venture type deals,” Harding told the Financial Gleaner.

Having taken full control of SSL REIT Limited, through subsidiary KW Logistics, Kingston Wharves Limited will rename a 110,000-square-foot warehousing facility registered to SSL REIT in Newport West as KW Warehousing Services Limited. The partners previously held 50 per cent each in the business.

“It’s just liquidity,” said Harding, regarding the reason for selling out to the port operator. “We’ve partners with Kingston Wharves and got a good offer from them, so we just agreed to sell it to them. It was a strategic decision,” he said.

Kingston Wharves Chairman Jeffrey Hall said Thursday that the full acquisition of the REIT business would better position the port company to meet expected demand for warehouse space for large cargo and goods.

“Our goal is to sit with the existing tenants of the business in the first instance to see how we can serve their interests,” he told the Financial Gleaner.

The subsidiaries of SSL Growth Equity now include SSL Asset Management Limited (Cayman); Dolla Financial Services Limited; SSL Capital (Cayman) Limited; SSL REIT Investors Limited (St Lucia) and its Jamaican subsidiary; and SSL Jamaica and its subsidiary SSL Ventures.

Aside from cleaning up the Group portfolio of companies to focus on core business, SSL’s board of directors – which as at December 2 included Brent Ciurlino, a US-based asset manager and a senior adviser; chartered accountant and investment manager John Jackson; and former marketing executive at Sony Pictures, Christine Birch – is seeking to remove “confusions” created from the similarity in names of SSL Ventures and Stocks and Securities Limited, Harding said.

The intended name change of SSL Ventures follows the suspension of trading in SSLVC stock back in June in response to the concerns raised by the Jamaica Stock Exchange regarding the adverse auditor’s report earlier that month in relation to SSL Ventures’ December 2018 year end results.

The suspension was lifted October 3, and SSL Ventures is now trading at $1.20 per share.

“What people have mistakenly saying is that Stocks and Securities Limited was kicked off the stock exchange and that’s not accurate, because Stocks and Securities does not trade. Because of that we took a decision to separate them and rename SSL VC to something else that doesn’t include SSL in the name.

The company initially chose Boost Ventures as the new name, but has since rejected that and expects to come up with a new identity by today, Friday.

Restructured as a venture capital investor from a reverse takeover of failed music publishing outfit C2W Music Limited in August 2018, SSL Ventures immediately acquired three marketing start-ups – Bar Central, Blue Dot and Muse 360 Integrated.

Harding is currently chasing several new leads and expects to close the fintech deal as the new year rolls around.

“We are looking at acquisition in the Fintech space. I’m travelling to the Caribbean right now for a couple of investor meetings. We have a very live and pending deal which we expect to close and announce within the next four to six weeks and that will be quite exciting. In addition to that we have three other deals that are in progress,” he said.

In the interim the company is still in deciding on whether it will merge, sell or conduct acquisitions under the shell company of Muse 360, whose founding CEO Andre Burnett quit the business, forcing SSL to weigh new options for the operations.

Harding says Muse 360 last posted a loss of about $30 million.

SSL Ventures itself recorded losses of $25.6 million for the quarter ended September 2019.

karena.bennett@gleanerjm.com