Insolvent SSL Ventures weighs capital injection

PRIVATE EQUITY firm SSL Venture Capital Jamaica Limited, which trades as SSL Ventures, says its board continues to mull the future of the insolvent company, which earns money from its investments in other ventures.

It plans to sell the rest of its holdings in data insight company Bluedot, the last investment remaining in its portfolio, next month.

“We are currently under contract for the disposal for the remaining 30 per cent and should close the transaction sometime in November,” said SSL Ventures Chief Executive Officer Anthony Dunn, in response to queries at the private equity firm’s annual general meeting held online on Wednesday.

Dunn said the group continues to receive investment opportunities from outside entities seeking capital, but needs to decide on its own path forward, including being recapitalised, before entering into new arrangements.

“As it stands now the company is insolvent, which would require some amount of capital injection,” added Dunn. “As our financials show, the company is insolvent, as our current liabilities exceed current assets. Certainly, as an investment company, we will always need capital to take on new opportunities. So the board and management will deliberate on our plans, and we will communicate to the market our way forward,” he said.

At year ending June 2021, SSL Ventures held negative equity of $232 million, which is roughly on par with its position a year earlier. Its cash balance is also in deficit at negative $3.2 million, a worse position than the year before when the deficit was $447,000.

“Certainly, we continue to get opportunities from entrepreneurs looking for capital, but we haven’t made any decisions since year,” said Dunn. “Based on the current state of the company, we are contemplating the future of the company, and we will advise the market when those deliberations are complete.”

SSL Ventures reported at end-June that it closed the period with “no active operating portfolio company”. That’s because the SSL Ventures had reached an initial agreement to dispose of all its holding in Bluedot in early 2020, and expected the deal to be finalised by then. However, the agreement was scuttled over delayed payment for the shares, a disclosure it made to the market in August.

SSL Ventures has since sold a 20 per cent stake in Bluedot to Yes Iyah, and is getting set to dispose of the final 30 per cent.

The private equity company reported a net loss of $321,000 for FY 2021, which was an improved outcome relative to the 2020 losses of $153 million. The improvement was primarily driven by the writeoff of payables of $96.4 million owed to its parent company, relating to Bar Central Limited, a previously held investment, the company stated in its financials. SSL Ventures was unable to secure a sale for Bar Central Limited and, as such, took the decision to write off intercompany balances to facilitate the winding up of the subsidiary.

Revenue for the year amounted to $19.3 million, compared to $116.7 million in the prior year. The revenue earned over the year ending June 2021 related to Bar Central Limited only, which was closed in December 2020.