Thu | Apr 2, 2020

Fesco IPO still on - But new date to be finalised in wake of Mandeville fire

Published:Wednesday | February 26, 2020 | 12:12 AMKarena Bennett/Business Reporter
Lynden Heaven (second right), chairman of Future Energy Source Company, signs the memorandum of understanding that will see NCB Capital Markets become the lead broker and arranger of the fuel network’s initial public offering of shares later this year. Looking on are NCB Capital Markets’ Manager of Origination and Structuring Simone Hudson-Bernard (left), and Vice-President of Investment Banking Herbert Hall (second left), and Fesco Chief Operating Officer Jeremy Barnes (right).
Lynden Heaven (second right), chairman of Future Energy Source Company, signs the memorandum of understanding that will see NCB Capital Markets become the lead broker and arranger of the fuel network’s initial public offering of shares later this year. Looking on are NCB Capital Markets’ Manager of Origination and Structuring Simone Hudson-Bernard (left), and Vice-President of Investment Banking Herbert Hall (second left), and Fesco Chief Operating Officer Jeremy Barnes (right).

Future Energy Source Company, Fesco, will need another two weeks to determine a new date for its initial public offering of shares on the stock market, says vice chairman Hugh Coore, a setback caused by a deadly weekend fire at one of the fuel stations in the network.

The petroleum market retailer says NCB Capital Markets Limited remains its adviser and plans for the market float intact, notwithstanding a request by the investment firm to pull a joint announcement of its selection as lead arranger of the pending equity transaction at the weekend.

The IPO was initially planned for the fourth quarter of 2020, but that date might be slightly pushed back following Friday’s fire at the Fesco service station in Mandeville, Manchester, that claimed one life, injured six others and damaged a dozen motor vehicles.

“We might defer the time a little, but we are not pulling the IPO. We will be going full speed ahead with it, but given the circumstances, we might just extend the launch of it a little bit,” Coore told the Financial Gleaner in an interview on Monday.

NCB Capital says issues relating to the IPO would be finalised with Fesco, in light of the new developments.

“I am not able to comment on the matter but I understand that the company will be sending out a statement later this afternoon,” NCBCap’s vice-president of investment banking Herbert Hall said Tuesday.

“The press release went out maybe an hour before the fire, and with an incident like that one wouldn’t want that announcement during the same period. That is why we were trying to retract the release,” he said, referring to last Friday’s press statement.

The petroleum marketing company has 14 stations in its network that are dealer owned-dealer operated and to which its brand is franchised.

The Mandeville station is owned and operated by Lynden ‘Trevor’ Heaven, one of the five dealers who partnered to form Fesco in 2013. The others are Coore, Errol McGaw, Junior Williams and Trevor Barnes.

Coore said the Mandeville station would be rebuilt, but the estimate of the damage caused by the fire was not yet available. The likely financial impact of the fire on Fesco’s own fuel supply operation is unclear.

Fesco’s owners plan to add seven more service stations to the chain by the end of 2020, one of which will be its first company-owned, company-operated location and head office in Kingston.

Last December, the company completed a service station at Bodles, Old Harbour, under its ‘destination’ model – which incorporates multi-services at Fesco complexes – and has done 30 per cent of the build-out of its largest destination station at Ferry, Kingston. A large service station is also planned for Mandeville, separate from the station that was damaged in the fire.

“We are moving ahead with our other plans,” Coore affirmed.

“There is Fesco and there are the Fesco franchises. If something took place at a franchise, it’s a little bit different from if it was a Fesco-operated location,” he said.

On Friday, the parties jointly announced that they had formally signed off on NCB Capital Markets as the arranger and lead broker of Fesco’s upcoming IPO.

Fesco would become the first fuel network to list on the stock market. It aims to list on the junior market of the stock exchange.

“I don’t want to say anything about financing until we meet as a company and make some strategic decisions. We will have to make an assessment as to the date within the next two weeks: It’s likely that the IPO will still be this year but we will have to meet and determine that,” the vice-chairman said.

karena.bennett@gleanerjm.com