Jun 2011 Financial News

FirstCaribbean snaps up GK shares... As JN, JP reduce holdings

Jun 15, 2011

Barbados-based FirstCaribbean International Bank has snapped up shares in local conglomerate GraceKennedy Limited to become a Top 10 shareholder with a near J$500 million portfolio.

The bank is now the seventh largest shareholder in the food and finance conglomerate with 8.6 million units.

FirstCaribbean aggressively acquired this position during the March quarter, buying between J$170 million and J$458 million worth of shares, based on comparisons of Jamaica Stock Exchange shareholder data and the GraceKennedy 2010 annual report.

Three separate attempts by The Gleaner to query the exact quantity and rationale for acquisition went unanswered up to press time.

The acquisition of the blue chip GK stock comes as FirstCaribbean's core business remains affected by the global recession.

Chairman Michael Mansoor in his April quarterly report cited "persistent soft loan demand and low interest rates" which slashed net income to US$25 million (J$2.14 billion) in the quarter, or 56 per cent below year earlier levels.

He noted that last year's results benefited from securities gains.

FirstCaribbean is the largest listed bank in the English-speaking Caribbean, with assets of over US$10.9 billion (J$935 billion) and market capitalisation of US$2.5 billion (J$214.5 billion).

The bank operates in 17 regional markets, including Jamaica, serving half a million active accounts.

The aggressive purchase by FirstCaribbean comes as Jamaica Producers, which offloaded millions of shares, and Jamaica National Building Society, which in 2010 owned some 6.04 million shares - down from 6.15 million in 2009 - and was the seventh largest shareholder, has since fallen from the top 10 list.

"We are not a major shareholder in Grace and did not sell any shares recently in Grace," responded Carlton Barkley, assistant general manager of finance, administration and planning in correspondence via JN's public relations department.

Two weeks ago JP revealed that it liquidated some of its holdings in GK and other stocks totalling some $903.7 million for capital to fund its growth plans. JP, however, declined comment on the volume and terms of the sale.

However, its holdings in GraceKennedy has fallen to 23.2 million shares as of March 2011, and while this represents a disposal of some 18 million shares since December 2010, JP remained the single largest shareholder in the conglomerate up to that date.

JP at December 2010 held more than 31.15 million shares in GK, making it the single largest shareholder with a 9.4 per cent interest. Its stake dropped to 7 per cent in March.

Most of the JP transaction occurred following the March quarter, and a highly placed source told the Gleaner that "subsequently, more developments have occurred in GraceKennedy's Top 10 shareholders".

JP's plans for the cash from the disposals were unspecified, but the company is about to diversify further into the coffee-growing and trading market in partnership with Pan Jamaican Investment Trust, pending successful conclusion of negotiations for majority acquisition of the state-controlled Mavis Bank Coffee Factory.

steven.jackson@gleanerjm.com

Top 10 GK shareholders at March 2011

Jamaica Producers - 23.2 million shares or 7%
GraceKennedy & Co Pension Scheme - 15.1 million shares or 4.5%
Luli Limited 14.9 million or 4.5%
National Insurance Fund 12.5 million shares or 3.7%
Life of Jamaica Ltd.Pool Equity Fund No. 1 - 12.3m or 3.7%
J.K. Investments Limited at 12 million shares or 3.6 %
FCIB (Barbados) Limited - 8.6 million shares or 2.6%
Celia Kennedy - 6 million shares or 1.82%
Douglas Orane - 5.8 million shares or 1.74%
Joan E. Belcher - 5.4 million or 1.64%


Source:
Steven Jackson
Business Reporter
Jamaica Gleaner
Wednesday June 15, 2011

http://jamaica-gleaner.com/gleaner/20110615/business/business2.html