Der­ri­mon shareholde­rs ap­prove $4.8-bil­lion APO

Daily Observer (Jamaica) - - BUSINESS OBSERVER - BY DUR­RANT PATE Ob­server Busi­ness Writer

THE way is now clear for Der­ri­mon Trad­ing Lim­ited to go to the equities mar­ket with another pub­lic of­fer­ing (APO) of shares to raise what is be­lieved to be as much as $4.8 bil­lion.

This fol­low­ing last Fri­day’s (Septem­ber 25) ap­proval by shareholde­rs of four res­o­lu­tions at the com­pany’s an­nual gen­eral meet­ing (AGM) held on Septem­ber 25, 2020 at Knutsford Court Ho­tel in Kingston.

The res­o­lu­tion au­tho­rises the com­pany’s board and man­age­ment to “is­sue up to 1.8 bil­lion or­di­nary shares by way of an of­fer for sub­scrip­tion to the pub­lic pur­suant to a prospec­tus (herein an ad­di­tional pub­lic of­fer­ing) in lieu of a rights is­sue to ex­ist­ing stock­hold­ers”.

At the cur­rent trad­ing rate of Der­ri­mon stocks at $2.70 and with­out any discount, 1.8 mil­lion shares would fetch $4.86 bil­lion.

Shareholde­rs have also man­dated the board and man­age­ment to de­ter­mine, in their dis­cre­tion, any terms and con­di­tions re­lat­ing to the APO. Any pre-emp­tion rights to which the ex­ist­ing stock­hold­ers may be en­ti­tled have been “dis­ap­plied” for the pur­poses of the APO, based on a res­o­lu­tion ap­proved by shareholde­rs.

The pro­ceeds of the fund-rais­ing event will be used for ex­pan­sion cap­i­tal and to write down debt. The APO is ex­pected to hit the mar­ket some­time in late Oc­to­ber to early Novem­ber, with the prospec­tus be­ing pub­lished within the next two to three weeks.

Der­ri­mon first went to the equities mar­ket back in De­cem­ber 2013 with an ini­tial pub­lic of­fer­ing, rais­ing $150 mil­lion. Speak­ing with the Ja­maica Ob­server re­cently, Der­ri­mon Chair­man and Chief Ex­ec­u­tive Of­fi­cer Der­rick Cot­terell ex­pressed con­fi­dence that the APO will be as suc­cess­ful as its IPO, which was closed three min­utes af­ter open­ing on Mon­day, De­cem­ber 2, 2013.

Back then the com­pany of­fered 73.33 mil­lion shares at a price of $2.05 per share.


In its re­cently re­leased 20192020 an­nual re­port, Der­ri­mon re­ported growth across all sub­sidiaries and ul­ti­mately the group re­alised a 36 per cent in­crease in rev­enue over the prior year. This re­sulted in profit be­fore tax grow­ing by 23 per cent and a record net profit of $303 mil­lion for the group.

Gross op­er­at­ing rev­enue at the end of De­cem­ber 31, 2019 was $11.638 bil­lion, up by $2.878 bil­lion or 32.86 per cent from the $8.759 bil­lion re­ported for the sim­i­lar 2018 com­par­a­tive pe­riod.

The dis­tri­bu­tion port­fo­lio ac­counted for $6.459 bil­lion, rep­re­sent­ing a year-overyear growth of $2.63 bil­lion or 68.53 per cent while the re­tail divi­sion ac­counted for $5.18 bil­lion, which was $253 mil­lion or 5.2 per cent over that gen­er­ated for the sim­i­lar pe­riod in 2018.

Cot­terell...ex­pressed con­fi­dence that the APO will be as suc­cess­ful as its IPO, which was closed three min­utes af­ter open­ing on Mon­day De­cem­ber 2, 2013

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