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Sygnus eyeing debt market next

Published:Wednesday | May 26, 2021 | 12:06 AMNeville Graham/Business Reporter
Jason Morris, co-founder and chief investment officer of Sygnus Capital.
Jason Morris, co-founder and chief investment officer of Sygnus Capital.

Sygnus Credit Investments Limited, SCI, will be heading to the market again to raise capital, but this time it’s going after debt on the private market. The company, which recently raised fresh equity on the stock market through additional public...

Sygnus Credit Investments Limited, SCI, will be heading to the market again to raise capital, but this time it’s going after debt on the private market.

The company, which recently raised fresh equity on the stock market through additional public offering of shares and earmarked half of it or US$13 million for investment, has not said how much more it will be targeting from the capital market, nor the precise timing of the next fund raise.

“Once we fully deploy that equity, we will be taking on debt as a next step; recognising that as a function of our balance sheet that debt is low and that we can draw down that debt in tandem with portfolio deployments,” said Jason Morris, chief investment officer for Sygnus Capital, the management company for Sygnus Credit.

Sygnus needs to raise another US$23 million under its current financing programme, which calls for US$50 million in capital for deployment.

It’s already more than halfway to the target, having raised US$27 million on the Jamaica Stock Exchange in January. The company utilised US$12.6 million of those funds to repay a bridge loan and the US dollar portion of a revolving credit line, and set aside US$13 million to finance its investment deals. Sygnus provides credit financing to companies as an alternative to bank and other debt.

Morris says the company still has US$8.20 million of ‘dry powder’, that is, uncommitted funds that are ready for deployment into new investments, in addition to US$2 million from revolving credit facilities.

The pandemic has seen a rise in demand for financing from companies, some to keep their operations afloat, while others are investing in capital projects to ride the wave of the pandemic and grow their markets on the upturn.

Over nine months ending March, SCI’s core revenue increased 24 per cent to US$4.25 million, while net profit attributable to shareholders grew 80 per cent to US$2.29 million.

“We really didn’t suffer much from the pandemic,” said Morris. “True, there were portfolio companies that we might have exited but we still didn’t have any realised loss,” he said.

Morris adds that one of the notable outcomes of the pandemic is that more and more companies are making enquiries regarding private capital support from Sygnus, “especially Jamaican-owned or Jamaican-run companies”. But: “We’ve been very deliberate as to where we deploy our capital,” he added.

While not giving specifics, Morris says Sygnus Credit has exited one of its portfolio companies, while remedial action was taken in regard to another.

neville.graham@gleanerjm.com