Oct 2005 Financial News

NCBJ sells $500-m KWL shares to its subsidiary

Oct 03, 2005

National Commercial Bank on Thursday sold over 100 million shares in Kingston Wharves Limited (KWL), to one of its subsidiaries, with the sale taking place uninterrupted across the floor of the exchange.

NCB in a press statement to the Jamaica Stock Exchange (JSE) on Friday did not name the subsidiary that bought the block of shares. The transaction, worth over half a billion dollars, was handled on both sides by NCB Capital Markets, the stockbrokerage and funds management arm of the bank.

The shares represent nearly 10 per cent of the total issued stocks of Kingston Wharves Limited.

It is not clear at what price the stocks were sold, though the closing price of the stock at the end of trade was $5.11.
NCB acquired the stake in Kingston Wharves in January 2004 when it paid GraceKennedy $1.30 per share or $610 million for its 470 million KWL shares or 44 per cent of the wharving company.

That stake made NCB the single largest shareholder in KWL, and ended GraceKennedy's long-standing control and management contract with the company.

With the sale to the NCB subsidiary, the banking group will maintain the same consolidated controlling stake in KWL.
It is not clear as to why the shares were transferred downstream to the subsidiary and banking officials declined comments.

It cost the NCB group about $2 million in fees to effect the buy-and-sell transaction across the JSE floor.

The purchase of the Kingston Wharves shares in 2004 came at the height of the portfolio and real asset investment by NCB's billionaire owner Michael Lee Chin, with most of the investments being done from profits generated by the bank following his March 2002 purchase of the Jamaican government's 76 per cent stake in the institution.

The other investments included:
. 30 million shares in Radio Jamaica, giving him almost 12 per cent ownership in the media grou;
. The 160,000 square-foot Mutual Life Twin Tower in Kingston, acquired from Finsac for $600 million;
. Just over $1 billion worth of shares in Desnoes and Geddes and Cable & Wireless Jamaica in October 2003.

Observer Reporter
The Jamaica Observer
Sunday, 2nd October, 2005