Sep 2009 Financial News

Access Financial to raise $100m in first Junior Market IPO

Sep 30, 2009

Access Financial, a consumer and small business lender based in Kingston, has received regulatory approval for an initial public offering on the Jamaica Stock Exchange's Junior Market, according to the company's CEO Marcus James.

The company is planning to raise around $100 million through the listing of some 5.4 million new ordinary shares, equivalent to about 20 per cent of the company's total stock, James noted. Access will have a total of 27.4 million shares following the increase.

Founded in September, 2000, Access sold a 49 per cent stake to Mayberry Investments in 2006 for an undisclosed sum, before setting its sights on a public listing. The company has some $400 million in extended loans in its portfolio, said James, noting that its employee headcount has grown from two at the company's launch to 88 today.

James said funds derived from the listing would be used to further grow the company, which intends to establish offices in every major town across Jamaica before looking towards regional opportunities. Currently, Access Financial has offices in Kingston, Portmore, Mandeville, May Pen, Ocho Rios, Montego Bay and Savannah-la-Mar. The company offers consumer loans from $5,000 to $350,000, and small business loans up to $5 million, taking non-traditional assets as collateral, like a bill of sale on a motor vehicle, heavy appliances, as well as more traditional assets like real estate mortgages for the small business loans.

Marcus said the company's prospectus has been registered with the Companies Office and will be available today on the websites of Access Financial, Mayberry Investments, and Access Financial. Mayberry has served as the company's financial advisor for the listing.

James said the tax incentives offered by the Junior Market would bring relief to the company. "Our tax rate is 33.3 per cent, tax is heavy, and as a result the [Junior Market] tax incentives are good - it was a factor in us deciding to list."

The incentives offered by the junior market include a five-year tax holiday on a company's full income, a half income tax holiday for the subsequent five-year period, and a full tax exemption for investors receiving dividends from junior market companies. Listing fees are also reduced for companies listing on the Junior Market, at 50 per cent of the cost incurred by companies listing on the JSE.


Source:
Oliver Hill Business Editor
Jamaica Observer
Wednesday, September 30, 2009

http://www.jamaicaobserver.com/magazines/Business/html/20090929T230000-0500_160766_OBS_ACCESS_FINANCIAL_TO_RAISE_____M_IN_FIRST_JUNIOR_MARKET_IPO.asp