Nov 2014 Financial News

Scotia Investments raises $1b for JP Group

Nov 05, 2014

SCOTIA Investments Jamaica Ltd (SIJL) raised $1 billion in financing for banana and shipping conglomerate Jamaica Producers Group (JP) in order to support its growth strategy.

The financing was done by structuring a corporate bond, SIJL Chief Executive Officer Lissant Mitchell told the Jamaica Observer on Monday.

"We raised $1 billion for JP to support their business strategy and it was done at the end of September," he explained. "It's primarily to finance their acquisitions."

The JP bond remains one of the largest deals done in recent times by SIJL.

"We don't shout too loud about our deals, but do the transactions quietly," said Mitchell, who added that institutions like JP are increasingly using corporate bonds for financing, as opposed to loans.

"Since the lowering of interest rates [over the years] the capital market has become a far more viable option for institutions trying to raise financing," Mitchell said.

Several calls to JP Group Managing Director Jeffrey Hall's phone went unanswered up to press. In September, Hall told the Business Observer that JP's most recent acquisition of shares in Kingston Wharves Ltd (KWL) would be financed by a mixture of debt and equity.

JP acquired $1 billion worth of additional KWL shares in a deal which also saw a $2-billion share purchase by Seaboard -- a global food, energy and transportation company listed on the New York Stock Exchange.

The acquisition increased JP's ownership from 30 to 42 per cent in KWL. In 2012, JP bought a 25 per cent stake in KWL for $1.8 billion. JP, a speciality foods and logistics group operating in the Caribbean and Europe, holds some $5.9 billion in equity.

Seaboard announced on Friday that it expects initial earnings from its investment to flow next year.

"Seaboard invested US$17.3 million in a cargo terminal business in Jamaica for a 21 per cent non-controlling interest," stated Seaboard in filings to its US investors. "This investment will be accounted for in the marine segment using the equity method reported on a three-month lag basis and thus Seaboard's first proportionate share of earnings will not be recognised until the first quarter of 2015."

Source:
BY STEVEN JACKSON Business reporter jacksons@jamaicaobserver.com
Jamaica Observer
Wednesday November 5, 2014    

http://www.jamaicaobserver.com/business/Scotia-Investments-raises--1b-for-JP-Group_17863255