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Financial News

Jul 2012 Financial News

Sagicor Financial sells J$3b of SLJ shares - Pan-Jam stake grows to 32.7%

Jul 16, 2012

Pan-Jamaican Investment Trust has increased its stake in Sagicor Life Jamaica (SLJ) to one-third of the life insurance company in a deal struck with its Barbadian parent on Friday.

The deal at J$10.20 per share was done at a discount to the market price last Thursday when the stock traded at J$10.74 per share.

It shaved five per cent or J$2 billion off Sagicor Jamaica's market value to J$38.3 billion.

Sagicor Financial Corporation (SFC) sold a total of 308.28 million shares through its subsidiary LOJ Holdings Limited to two parties: Pan Jam bought close to 299.52 million units and Trustee Sagicor Long Term Incentive Plan bought the other 7.4 million SLJ shares.

"Our investment in SLJ has performed well for us and we believe it has a good future. We are happy to have an increased stake in the Sagicor Jamaica Group," said Pan-Jam President & CEO Stephen Facey in a joint statement issued with Sagicor.

The sale has diminished Sagicor Financial's holdings in the Jamaican company to 51 per cent from 59.2 per cent; and increased Pan Jam's holdings from 24.8 per cent to 32.7 per cent.

"This transaction is part of a larger strategic initiative to rebalance our investment portfolio in line with the Sagicor Group's long-term strategic plan," said SFC chief executive officer, Dodridge Miller in a statement announcing the sale.

Miller indicated that the proceeds of the sale - amounting to J$3.14 billion or US$35.3 million - would fund a targeted acquisition in the United States market.

He said the group's US business, Sagicor Life Insurance Company (SLIC), had since February indicated it would be acquiring PEMCO Life Insurance Company from its parent, PEMCO Mutual Insurance Company.

"The PEMCO acquisition is subject to regulatory approval, and if approved will result in SLIC acquiring an important block of new business and new customers, with approximately 10,000 term and whole life policies and 7,500 new policyholders being added to SLIC's portfolio," he said.

Sagicor Financial is a US$5.3 billion company servicing 600,000 policyholders from operations in 22 countries. Its Jamaica subsidiary, run by Richard Byles, is its most profitable business, contributing US$67 million of segment income in 2011.

The pending PEMCO acquisition follows a deal struck by Sagicor Financial with governments of the Eastern Caribbean to acquire 17,500 health insurance and property portfolios of British American Insurance, a failed regional operation.

"These transactions all form part of a rationalisation of the group's regional and international holdings as we seek to enhance long-term profitability, and optimise our capital structure," Miller said.

Jamaica Gleaner
Sunday July 15, 2012