Jamaica Producers offloads stake in wharf property company
Food and logistics conglomerate Jamaica Producers Group Limited, JPG, inked a deal to sell its holdings in an associated property company for $1.9 billion.
JP is offloading its 22.1 per cent interest in SAJE Logistics and Infrastructure Limited, formerly known as Shipping Association of Jamaica Property Limited, and will use the proceeds to invest in other food and logistics operations.
“We doubled the value of our investment over five years,” said JPG Managing Director Jeffrey Hall. “By implication, the gains are half of the $1.9 billion,” he told the Financial Gleaner.
Explaining the sale of SAJE, Hall said it was meant to eliminate duplication in real estate and investment activities in its port holdings. JP will continue to hold 9.5 per cent interest in SAJE through port subsidiary Kingston Wharves Limited.
SAJE is in the business of acquiring and developing commercial real estate, mostly around the waterfront. It primarily owns and rents land and building space in the Newport West area of Kingston.
“A number of its large real estate holdings are currently located near the port of Kingston. We are pursuing opportunities of this type by way of Kingston Wharves and, as such, elected to divest our interest in SAJE,” Hall said.
JPG is selling the 22.1 per cent stake back to SAJE. The property company is acquiring the subsidiary in which JP holds the 22 per cent SAJE stake. The deal is expected to close by month-end, and the conglomerate expects to book the gains from the sale in its third-quarter financial results.
In 2019, Jamaica Producers accounted for its equity stake in SAJE Logistics and Infrastructure at $626 million. The sale deal at $1.9 billion is three times that amount, and JP expects to book around half of the sale consideration as a gain.
“We netted a good gain,” Hall said.