Paramount adds chlorine & bleach

Paramount Trading expanding into Chlorine and bleach processing.

Paramount Trading is expanding its operations by offering chlorine and bleach products for contract manufacturing, the company reported.
“The Company recently completed construction of the infrastructure required for a new chlorine and bleach plant at its 6 East Bell Road, Kingston 11 location, which will be outfitted with state of the art equipment and advanced technology.
The Company plans to commence operation of the plant in February 2018,” the release from the company states.
The Company also advises that on 26 October 2017 it entered into an Asset Sale Agreement to acquire bleach plant equipment and other assets from Seprod, for its new chlorine and bleach operations. This acquisition is in line with the Company’s goals to continuously strengthen its presence as a manufacturer in the chemicals market, and will complement the Company’s existing offerings.
Paramount Trading, enjoyed a big turn-around in profit for the first quarter to August this year, with an increase of 126 percent, to $34 million from a 31 percent increase in revenues to $331 million.
The directors’ report that accompanied the August quarterly results stated that they have “an optimistic outlook for the rest of the year and is very excited by the opportunities that will be realized. The construction of the blending plant and laboratory, in conjunction with Alllegheny Petroleum is slated to be complete during the next quarter.”
The stock currently trades at a PE ratio of 15 with the price at $3 on the Junior Market is in against the line with the market. What is true, is the nimbleness of management to identify new income generated opportunities that makes staying close to the stock potentially profitable.

Lasco damages to be computed

Lasco Distributors who won the case against Pfizer for damages resulting from an injunction preventing Lasco from selling Salts of Las Amlodipine in Jamaica from 2005 until 2014 is awarded J$155,738 for disposal of inventories.  
The major part of the claim, that of loss of profit, is to be computed and presented on the November 24. The court awarded interest to be computed at a rate of 8.23 percent from 2005 to 2017 on the disposal of the inventory at the time the injunction was made.
Medimpex has been awarded US$77,000 to be converted at the rate of J$69.06 to the US dollar, for inventories with interest to be computed. The Judge states that the claims by the two Jamaican firms are too high based on the evidence while the amount suggested by Pfizer was too low. Lasco’s claim was for US$300 million in lost sales plus interest and cost and Medimpex US$15 million.  The award for partial damages was handed down by Justice Viviene Harris today after presentations by Pfizer, Lasco and Medimpex, a third party to the claim.
Lasco who won the case in the Jamaican courts ultimately won the matter after Pfizer appealed the decision to the Privy Council in the UK. Based on the ruling Lasco resumed sale of the product in 2012.
The suit claimed that Pfizer was the registered proprietor of Jamaican Patent No. 3247 granted by the Governor General of Jamaica on the 22nd January, 2002 to Pfizer’s agent, Maurice Robinson for the protection of the invention “Salts of Amlodipine/Amlodipine Besylate. Robinson assigned the Patent to Pfizer on the 22nd March 2000.
The Company began to sell “Las Amlodipine” which contained Salts of Amlodipine in Jamaica in May, 2002. In 2003 Pfizer joined the Company in a suite that Pfizer had commenced in Jamaica in 2002 under action No. P040 of 2002, to protect its rights under the Jamaican Letters Patent and the Company was constrained to cease selling Las Amlodipine by an injunction granted on the 31st March, 2005 in that action. The weight of the defense mounted by the company was that under the provisions of the Patent Act of Jamaica, the Jamaican Patent was not in force when the Company started to market its own product, Las Amlodipine since an earlier patent No. 18266 granted to Pfizer in Egypt had expired on the 30th March 1997.

Lasco Distributors products.

The court in 2009 found that the case for Pfizer for an infringement of Jamaican Patent No. 3247 failed for the reason that it was not valid and subsisting because Letters Patent 19266 for the same substance filed in Egypt in March, 1987 had expired on March, 1997 prior to the grant of Letters Patent 3247 in Jamaica on 22nd January, 2002. For this reason the court gave judgment in favour of the Company.
Lasco had previously committed to pay a portion of the amount to shareholders as dividend but has so far not stated the likely amount.
Lasco Distributors is listed on the Junior Market of the Jamaica Stock Exchange and traded at $8.01 on Thursday and was priced for a big settlement.

More business for Cable & Wireless

Jamaica’s Cable & Wireless seems to be making head ways with continued growth in some segment of the business but saw a small fall in their mobile customer base from June to September.
According to data provided by Liberty Global quarterly report, their Jamaican operations saw fixed lines rose 1,300 to 262,500 in September than at the end of June, internet grew by 5,500 customers to 153,700, Telephony subscribers moved by 10,400 to 206,600 customers but mobile customers fell 3,400 to 930,500.
What has not been mentioned, is that the local company introduced a series of rate increases starting in August 16th as their customers started paying sharp increases for calling to most overseas destinations, with calls to the United States, United Kingdom, China, India and Spain by up to fifty percent. Customers with the FamUltra, Post-Paid plan, will pay up to 50 percent more. Other affected packages will see increases of up to a third of their current charge prior to the increase. Subsequently, the company implemented increases of 6 to 10 percent on some landline services effective October local rates moved from 99 cents to $1.05 6 perform Call to Digicel line moved from $2.40 to $2.55 and other local operators fixed lines USS Canada and UK landlines moved from $10 to $11.
Cable & Wireless rose 4 cents to $1.07 on the Jamaica Stock Exchange on Wednesday.

Pulse Investments cans Rights Issue

Kingsley Cooper Chairman of Pulse

Pulse Investments (PULS) has canned their previously proposed rights issue of ordinary shares, instead the company has resorted to bonds financing, the preferred approached minority shareholders had recommended at the 2016 annual General meeting.
The proposed debt financing did not find favour with the directors hence their attempt to seek equity funding. According a release of the company, “the Board decided that the Company will not pursue the previously announced rights issue, as it has now secured funding from a related party as well as a bond from NCB Capital Markets. The Directors decided, on reflection, that the funding now secured, is a less expensive alternative for the company than the rights issue would have been. Further, no shareholders run the risk of dilution of their Pulse shareholding as a result of the current course of action.”
PULS further states that it wishes to clearly indicate that the rights issue, which would have been arranged and brokered by NCB Capital Markets, had been approved, with sufficient commitments made to ensure that the issue would have been fully subscribed.

Can NCB ignore compelling Guardian buy?

NCB Financial acquisition of 29.99 percent stake in Guardian Holdings cost $28 billion 2016. Make it the largest shareholder in an attempt to return it to majority ownership to which it previously belong.
If NCB were to increase their holdings to more than 50 percent it would strengthen their hands in greater integration of the group with the focus on cost reduction and income enhancement. Two areas would be, a possible merger of the two general insurance companies that would increase the muscle in the market and cut out lots of duplicated cost, the life insurance could also generate savings and increase potential income. An on the capital market side there is much to be gained with an increased financial strength that could become a real powerhouse in raising and providing capital within the region. But there at least one more compelling reason, Guardian’s profit for the six months to June is 83 Trinidad cents per share and is ahead of the 70 cents earned in 2016, earnings for 2018 should end up around TT$1.90 up from $1.61 last year. NCB currently trades in

Guardian Holdings closed at a 52 weeks’ high of $16.75 on TTSE..

Jamaica at a PE of 12 times 2017 earnings while Guardian earnings is below 7, any acquisition around the current price would be a huge steal for NCB and would be a big boost to the growth in 2018 earnings and by extension the stock price. That is far too attractive a deal for NCB to forego at this time. Raising the shareholder to 75 percent would create increased profits around J$2 billion and add about $12 to the stock price and that is without any group synergies.
At the time the acquisition, some 36 percent of the company was available for sale not including International Financial Corporation block which NCB acquired. Had they gone for the full amount, it would have triggered the takeover rule of the Trinidad and Tobago Stock Exchange and would have required the group to have much more funds available, to swallow a much larger amount. A year and half having elapsed since that acquisition NCB has amassed more of its own funds by way of retained earnings and lately, from a floatation of bonds on the local market that initially raised $18 billion, the equivalent of US$138 million in September and a further attempt to raise US$105 million at attractive interest rates.
The funds raised was said to be used for regional and local expansion and acquisitions by the group. Acquisition of more Guardian shares seems to most logical more, along with more JMMB Group shares.
market capital is TT$3,538,793,786, a 20 percent stake that would take NCB’s stake to just under 50 percent, could cost around US$105 million, an amount that is well below the amounts raised recently and with the amounts they went to the market for giving them the financial muscle to acquire an additional 45 percent at current prices, that could take the ownership to 75 percent.
The case of acquiring JMB shares is compelling NCB with 26.3 percent of the issued ordinary shares is by far the largest shareholder with next being JMMB ESOP with 9.6 percent but Trinidad’s Colonial Life Insurance with a block of 6.3 percent can no longer be seen as long term holder and these shares may well become available for sale which NCB maybe best suited to acquire. The reality is that the Duncan’s family no longer holds a commanding interest in the group and based on the top 10 listing may just be able to muster votes of about 23 percent.

Is war about to break out for SVL board room?

War seems about to break out over board room composition at Supreme Ventures, as the largest block of shares in the company, recently underwent a major ownership change.

Accordingly, the current board issued a release on the matter today. The board noted the recent reports of the $2.9 billion block share transaction buy out of Supreme Ventures Limited (SVL), by Zodiac International Investments & Holdings Limited and Mayberry Investments.
The company confirms that it has received correspondence from Mayberry West Indies Limited for an Extraordinary General Meeting (EGM) to pass a resolution to remove seven current members of the SVL Board.
The current list of Directors include SVL’s Chairman, Paul Hoo, as well as Peter Chin, Richard Foreman, John Graham, Steven Hudson, Ian Moore and James Morrison.

Mayberry crossed 40m C&W shares.

The letter, sent jointly under the signatures of Mayberry West Indies’, Castries, St Lucia, Bamboo Holdings Limited and Konrad Mark Berry, also outlines the intent to appoint seven (7) new Directors to the SVL Board, namely Christopher Berry, Gary Peart, Nicholas Mouttet, David McConnell, Peter McConnell, Ansel Howell and Lance Hylton.
In acknowledging the developments, Chairman Paul Hoo stated, “We have been made aware of the intent of major shareholders to have the EGM and effect some changes at the Board level. The discussions are ongoing, and as such I cannot comment too much at this time. What we can definitively say is that the SVL Board holds the interest of its shareholders as paramount, and even as we deal with the issues arising out of these developments, we are reiterating our continued commitment to exercise our fiduciary responsibility to all shareholders, as well as to protect the image and reputation of our company and our committed team.”
According to SVL President & CEO, Ann-Dawn Young Sang, “Our dedicated team continues to remain focused to build and grow our great company.”
There have been recent reports in the media of the significant shareholder transactions in the last couple of weeks. Based on these transactions, the ownership interest of SVL’s major shareholder, Zodiac Caribbean Ventures Limited – former name, Intralot Caribbean Ventures Limited – (ICVL)) has been reduced from 49.896 percent to 38.3245 percent. ICVL will now be fully owned by Zodiac International Investments & Holdings Limited a company registered in St. Lucia. Mayberry is said to have recently picked up a block of 300 million units or around 11.375 percent of the company’s shares.

6M Berger shares taken up?

Trading in Berger Paints shares are now trading after trading was suspended two Thursdays ago.

Trading has resumed in Berger Paints after it was suspended ahead of the closing date for the offer by Ansa Coatings to acquire the minority shares at $10.88.
Trading took place between $11 and $11.50 with 213,774 units changing hands. So far the company has not released information on the number of shares that were offered as a result of the offer. IC Insider.com gathers that the take up is around 6 million units, if so it would represent around 3 percent of the issued capital of the company.
this would be in keeping with some of the to minority shareholders coming out publicly against the offer price and with more than 31 percent of the holdings held by entities that were not in support of the offer.

Stinking Berger behaviour

There are some strange and shocking developments regarding the offer by Ansa Coatings International to purchase the minority shares in Berger Paints Jamaica.
First the directors in recommending that shareholders accept the offer made critical claims that are not back up by facts and they offer no information to support same. Secondly, the shares have been suspended in questionable manner and without adequate reasons.
The directors in recommending that shareholders accept the offer said,” in your directors view, it is highly likely that acceptance of the offer will take the aggregate holdings of ACI beyond 80 percent. Under the rules of the Jamaica Stock Exchange, where one shareholder either individually or collectively with concert parties holds more than 80 percent of the listed shares of a company, the stock exchange has the right to de-list such company. In fact the offeror has made it clear its intention to delist the Berger Shares.” The directors’ recommendation goes on to quote ACI statement that they will seek delisting if they acquire an additional 29 percent of the shares. “It is therefore clear that Berger Jamaica shares will in all probability be delisted from the JSE,” the directors’ statement concluded.
According to the directors, Ansa Coatings International controls 51.01 percent of the issued Berger Jamaica’s shares and as a result of this Offer, its holding will most likely exceed 75 percent.
It seems that for the recommendation to shareholders to be substantially based on the “highly likely that acceptance” taking the holdings of ACI beyond 80 percent and most likely exceed 75 percent, is highly flawed. Where did the directors get that information from and why did they not disclose the source in the recommendation. Why they did not think it appropriate to disclose the interim results figures up to August in the report?
At $10.88 per share, Berger is priced at 5 times the current years’ earnings against more than 13 for the main market, on what basis could it be regarded as a fair price?
The situation gets more curious and raises a huge question, is someone is trying to manipulate shareholders in giving away their shares at less than a fair price? That is the only conclusion to be arrived at, when without notice, the shares of Berger were without notice, suspended by the Jamaica Stock Exchange on Thursday, October 5, 2017 and is to remain suspended to Friday, October 13, 2017. According to a release late on Thursday, “this is to facilitate the processing of the transaction in respect to shareholders of the Company who have agreed to sell their shares to Asna Coating, as a part of their Takeover Bid of Berger.” That of course is a load of crap. Trading shares of Desnoes and Geddes a much bigger company was never suspended when Heineken acquired the minority shares in 2016, Hardware and Lumber shares were never suspended either, nor was Scotia Investments’ in Scotia Group’s recent acquisition of the minority shares. Why is there a need to prevent Berger shareholders who want to trade the shares if they so desire? Worse why is there need to suspend it beyond Monday?
The capital market cannot prosper as well as it should if the above abuses continue to take place without corrective action being taken. The Jamaica Stock Exchange and the Financial Services Commission should have intervened when the directors’ recommendation included information that was not backed up by facts and should have intervened and prevented the unwarranted suspension of trading in the company’s shares.

Berger shares suddenly suspended

Trading in Berger Paints shares surprisingly suspended on Thursday

Trading in shares of Berger Paints Jamaica has been suspended effective with the opening of the market on Thursday, October 5, apparently based on a request from the company on Wednesday and to the surprised of investors.
Information gleaned is that the request if for the shares to be suspended up to and including Friday, October 13. The request is very strange and unusual, with the buyout offer set to expire on Monday October 9. IC Insider.com gathers that, Rule 411b of the Stock Exchange states that a listed company may make application in writing and accompanied by certified copy of the resolution of the board requesting the suspension stating in writing the reasons for the suspension.
It unclear, to what extent the above rule was complied with. IC Insider.com gathers that the regulatory arm of the exchange had several calls on the matter and are seeking clarification on the matter.
With most shares kept in an electronic form the need for suspending trading is not warranted and worse for the request to go beyond Monday is unnecessary. Persons making the request are not taking in consideration investors and the need to keep trading in the share open for their convenience. The suspension request is raising concerns that there are persons who want to unduly influence investors to dispose of their shares to Ansa Coatings, even when there is no evidence that the shares will be well accepted and lead to delisting of the company.
The offer to buy the minority shares of Berger followed Ansa Coatings gaining majority shares when they acquired to parent company and resulting in a mandatory offer for the rest. The price offered is $10.88 per share but the stock has consistently traded above this level since March this year.

Trinidadian set for biggest share in SVL

Supreme Ventures set to be controlled by Trinidadian company.

Zodiac International Investments and Holdings Limited, a Trinidad & Tobago based corporation is making plans to take controlling interest in Supreme Ventures, IC Insider.com has gleaned from a reliable source.
Zodiac International indirectly owns half of the 49.90 percent of Supreme Ventures shares controlled by Intralot Caribbean Ventures. Zodiac International is seeking to acquire the remainder of the shares it does not already owns, making them the largest single shareholder if they succeed with the acquisition.
This publication understands that the company has engaged a leading local investment house to raise privately US$40 million to fund the acquisition. There are no indications that Zodiac intends to move the holdings beyond 50 percent and they may well sell of a portion to take it lower.
Supreme Ventures traded at $11 on the Jamaica Stock Exchange on Tuesday putting the value at $29 billion or about US$220 million.
Profit for Supreme Ventures surged 41 percent from $649 million to $918 million after tax, with second quarter profit jumping by a lesser 34 percent to $502 million from $374 million in 2016. Caymanas Park conducts live horse racing in Jamaica and was acquired earlier in the year by Supreme Ventures and is yet to start contributing to profits of the group.