Watch Barita with a new rights issue

Barita eyeing acquisition.

Barita Investments is planning another rights issue to raise new capital that is being earmarked IC gathers to fund a major expansion.
A Directors meeting is set for Thursday, July 11, at which they will consider the recommendation of a rights issue to the company’s ordinary stockholders.
IC gathers that the issue will be fully underwritten but will likely be renounceable which means shareholders will be able to sell their rights if they want to.  The terms and conditions are likely to be approved at an extraordinary meeting of shareholders to be convened by August.
The price has not yet been set but there is a view that it will be at about around 30 percent to the then market price. There are views suggesting that the nine months’ earnings are likely to be boosted by a sharp bounce in the company’s investment portfolio, courtesy of a booming stock market, increased fee income and a rise in fees from a growing unit trust portfolio that is benefitting from the buoyant stock market and pulling in new investors. Strong gains from investment banking activities are said to be major factors driving revenues and profit, the result of several deals that were finalized during the June quarter. IC also gathers that foreign exchange trading has also ballooned and brought in much more income than previously.

Barita Investments headquarters

Importantly, our source is suggesting is that the rights issue that should bring in around $4 billion in fresh capital is primarily targeted to fund an acquisition that have Caribbean while locations and will make a big impact on profitability when fully integrated into the existing structure, if the deal goes through. IC had projected the earnings for 2019 at $3 per share> With the consolidated of operations and acceleration in earnings that seems to be taking place starting with the second quarter earnings for the full year is most likely to exceed the above forecast handily. If that happens then the stock could be trading in the $60 region before too long after the third quarter numbers are released later this month.
The third quarter report shows total assets jumping to $27.7 billion from $16 billion at the end of March 2018 with equity capital at $7.8 million up from just $2.9 billion at the end of March 2018. Revenues net of interest expense more than doubled in the March 2019 quarter to $770 million from $329 in 2018 and profit rising to $408 million for the quarter compared to just $88 million in the 2018 quarter.  For the half year net revenues grew to $1.16 billion from $490 million in 2018 and profit rose to $517 million from $49 million.

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