Innovative Energy to raise capital via share issue
Innovative Energy Group Limited, IEG, formerly known as Ciboney, will issue 850 million new ordinary shares, with the intent of raising fresh equity capital.
“Additional capital is required, but we are exploring options outside of an additional public offer,” said Director Wayne Wray in response to the Financial Gleaner.
“Options are being explored … it is a work in progress,” Wray said.
One of those options could be a rights issue, which operates generally as a first call on existing shareholders to put fresh capital into the business in exchange for more shares; another could be issuing the shares as payment for acquisitions, in lieu of cash.
Innovative will seek shareholder approval for the creation of the new shares at its annual general meeting scheduled for January 2025. Agreement by shareholders would see the number of issued shares rising from 546 million to 1.396 million units, assuming full allotment.
The IEG shares currently trade in the $1 band.
The company is held 69 per cent by Executive Chairman Nigel Davy and Director Jennifer Davy. Its other directors are: Wray, Kyle Davy, Winston Watson, Conley Salmon, Albert Gordon and Donald Patterson.
The investors in Innovative Energy acquired Ciboney as a shell operation whose former dealings was in the resort market. The rebranded company is being transformed into a renewable energy business.
For the year ending May 2024, Innovative Energy Group made a net loss of $11 million, reflecting the level of spending in one year amid efforts to start the process of transforming the business – costs that were attributed to restructuring efforts, professional fees for acquisition activities, and the development of a marketing plan. IEG reported nil core revenue, but posted other income of $500,000.
Subsequent to its year end, in late August, the company signed an agreement to acquire 100 per cent of Innovative Energy Company Limited, IECL, for US$17.7 million or about $2.8 billion, a purchase that gives it a business involved in renewable energy development and project management in the Caribbean, with annual revenues exceeding $1.4 billion.
The transaction details are still being finalised between the parties.
IEG intends to operate as a “distributor and seller” of renewable energy products in Jamaica and the wider Caribbean, whereas “IECL will continue its activities in renewable energy development, engineering, procurement, construction, and project management,” the company noted in its newly released annual report.