Oct 2010 Financial News

Pan-Jam increases stake in First Jamaica

Oct 20, 2010

Pan-Jamaican Investment Trust has increased its shareholdings in its investment and property subsidiary First Jamaica Investments Limited (FJI) with the purchase of some 20.826 million shares from a pool held by Sagicor Life Jamaica.

Sagicor in turn has doubled its position in Pan-Jam.

The trade recorded on the stock exchange last Thursday at J$36.25 per share pushed Pan-Jam's equity stake in FJI to about 80 per cent, up from 73 per cent at the end of December last year.

The transaction included 19.3 million shares from the holdings of Sagicor Pooled Pension Fund, combined with approximately 1.5 million from another segregated equity fund.

"We at Pan-Jam saw the opportunity as a relatively compelling one, the shares being sold at a discount to book value," said Pan-Jam director Paul Hanworth.

"It is among one of the best opportunities found over the last couple of years."

Pan-Jam also owns businesses in insurance and investments. Its portfolio of assets also include minority stakes in insurance company Sagicor Life Jamaica, hardware retailer Hardware and Lumber and spice company Walkerswood as part of a consortium of investors under the New Castle Company Limited registered in St Lucia.

Both Pan-Jam and First Jamaica are controlled by the Facey family.

The acquisition of the FJI shares was valued at J$755 million, based on Thursday's closing price of J$36.25 per share.

"We see more opportunity in Pan-Jam and so we made the decision to sell (FJI shares). Pan-Jam also has other investments which we find interesting as opposed to First Jamaica," said Richard Byles, president and chief executive officer of Sagicor.

(First Jamaica owns 24.5 per cent of Sagicor).

Sagicor used the FJI proceeds to fund its acquisition of 11.276 Pan-Jam shares from Guardian Life - a deal valued at J$530 million based on the share price of J$47.

"It was just an exchange of shares in which the money was used to buy back shares in Pan-Jam while some was kept as cash or used for the purchase of other shares on the market," Byles said.

The acquisition doubles Sagicor's stake in Pan-Jam to 13.23 per cent.

Both Pan-Jam and First Jamaica have been trading fairly well on the market with an undisclosed party connected to First Jamaica acquiring 6.86 million of the company's shares on August 6 - amounting to just about 2.26 per cent of equity.

Along with Pan-Jam, other shareholders of First Jamaica include National Insurance Fund, Guardian Life of the Caribbean, and Scotia Jamaica Investment Management Ltd.

While a steady market performer, First Jamaica at half-year ending June 30, saw a drop in its profit levels by 25 per cent to J$746 million, impacted by lower investment income and earnings from associated companies.

Similarly Pan-Jam also returned lower half-year net profit of J$542 million at the end of June, a 32 per cent decline over the 2009 period.

Parties with a substantial interest in Pan-Jam, among its register of 2,361 stockholders, include Boswell Investments Limited and connected company Orange Hall Estates Limited, as well as Sagicor Pooled Equity Fund and the National Insurance Fund.


Source:
sabrina.gordon@gleanerjm.com
Jamaica Gleaner
Wednesday October 20, 2010

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