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PanJam gets shareholder nod for US$100m share offer

Published:Friday | September 4, 2020 | 12:21 AMNeville Graham - Business Reporter

Shareholders have given the nod to PanJam Investment Limited’s plans for an additional public offering of shares, APO, through which the company aims to raise US$100 million ($15 billion).

The vote on Tuesday clears the way for the property and investment conglomerate controlled by brothers Stephen Facey and Paul Facey to raise its authorised capital to two billion shares, up from 1.25 billion, and to later execute a stock split of both the authorised and listed shares.

Currently, 1.066 billion of PanJam’s shares are listed on the Jamaica Stock Exchange.

The current plan is for the stock split to be executed in tandem with the APO, per the resolution voted on at the meeting, but the company signalled even before the vote that the split was not a certainty.

Additionally, with the market stubbornly in bear territory since March, when the coronavirus was first detected in Jamaica, the company plans to bide its time in offering the new shares for sale.

“PanJam is considering an additional public offering but I want to be clear – we do not believe that the market conditions are suitable now,” Senior Vice-President for New Business Development and Strategy Joanna Banks told shareholders at the virtual meeting.

The combined market is down 28 per cent year date, as is the JSE Main Market on which PanJam is listed. The PanJam stock, which is underperforming both indices, was down more than 31 per cent as of Wednesday when it settled at $69. The stock has traded within a range of $60 to $105 over the past year.

Banks said the company’s board would determine the right time to approach the market. The funds targeted under the APO will be used to finance the company’s pipeline of investments and other opportunities that may arise. The VP said the proceeds would be directed to M&A activity and further investment in associated companies.

The details of the APO are still being worked through, with Banks noting that one of the considerations for its pricing is the structure of the company’s shareholdings.

“As we go forward, should we decide to pursue an APO, we aim to minimise dilution through appropriate pricing as determined by our directors,” she said.

The Facey brothers own or control over 40 per cent of the company, with most of the other top-ten owners being pension funds.

PanJam executed a five-for-one stock split in 2016, but Banks noted that there have been regular calls for another to make the stock more easily available for trading.

“There is no guarantee that a stock split will occur, but this gives the company the right to execute one if conditions allow,” the vice-president said ahead of the vote.

neville.graham@gleanerjm.com