Eppley plans to issue between 41,666,667 and 58,333,334 –Preference Shares to the public at $6 each, and maturing on 30 November 2019. The company reserves the right to take up additional amounts not exceeding $350 million, in the event that the subscriptions exceeds $250 million.
Dividends will be paid monthly at the rate of 10% per annum for the first two years, 11% per annum for years 3 to 4 and 11.5% per annum for the final year. This issue will be the second preference share to be offered to the market, since last year by the company.
The Invitation will open at 9 am on the Opening Date, Tuesday 11 November 2014 and will close at 4 pm on the Closing Date, Tuesday 18 November 2014 subject to the right of the Company to: (a) close the Invitation at any time after it opens once applications for all Preference Shares in the Invitation are received; and (b) extend the Closing Date for any reason, provided that it does not extend beyond the expiration of 40 days after the publication of this Prospectus
The Company reserves the right to redeem the Preference Shares (in full or part) on any dividend payment date that is not less than three years from the issue date at the higher of: (a) the Invitation Price plus 1 percent; or (b) the average of the last 10 days’ closing market prices on the JSE, prior to the notification date, plus any accrued and unpaid dividends subject to 30 days notice.
Eppley’s directors stated in the prospectus that “since the company’s initial public offering, of ordinary shares in July 2013, the company invested over $600,000,000 in the expansion of its credit business. The Company has deployed most of the capital it raised in its 2018 Preference Share issue in November 2013.”
Eppley provides credit to clients, allowing policyholders to finance insurance premium payments for property and motor vehicles. It also provide lease and commercial loan financing to medium and large businesses.
The ordinary shares are held mainly by Musson Investments – 37.68 percent, General Accident – 9.17 percent, ATL Pension – 25.65 percent and Stony Hill Capital – 15.28 percent.
Jamaica money Market Brokers are the brokers to the issue.
For the six months to June profit of $30 million was achieved from revenues of $74 million. At the end of June the company’s equity is $336 million with debt capital of $428 million. The proposed offer will raise debt to at least $678 million putting the leveraging at a high level. It seems as if the company needs a dose of ordinary equity as well as debt funding.