Mar 2016 Financial News

Jetcon to raise $96 million in March IPO

Mar 09, 2016

Jetcon Corporation Ltd, another company seeking to beat the March 31 deadline for Junior market listings, is offering 44.5 million new shares for a subscription price of up to $2.25 each in an IPO being brokered by JMMB Securities Ltd.

Closing date for the offer is March 17.

The company, principally owned by Andrew and Gillian Jackson, is seeking to raise approximately $96 million, but will be able to list if it raises $86.85 million.

Andrew Jackson, managing director, founded Jetcon Corporation in 1994 to handle the importation and sale of pre-owned vehicles.

Company chairman is chartered accountant and investment advisor John Jackson.

Jetcon serves the market for smaller, more affordable cars – selling pre-owned vehicles imported from Japan and providing related products, motor vehicle servicing and parts.

The company is self-described as a premier dealer of pre-owned vehicles, with sales reaching $523 million in 2015.

If the company’s shares are admitted to trading on the Junior Market of the JSE before March 31 the company will benefit from a five-year concessionary tax regime that starts from the date of listing during which it will be eligible for a full remission of corporate income tax.

The prospectus indicates that proceeds of the IPO will be used to pay down interest-bearing bank debt and upgrade and expand the existing building on the property at Sandringham Avenue and the bonded warehouse to allow for a showroom and more storage space for cars.

It also aims to source working capital support for the purchase of inventory, and finance the cost of the IPO.

Up to 9.5 million shares in the IPO are initially reserved for priority application with pricing of $1.87 per share for board members excluding the chairman, $1.70 for senior managers and employees of the company excluding the managing director, and $2.08 for existing customers. One and a half million shares set aside for the chairman are priced at $1.25 each.

Following the invitation, 195 million shares are expected to be on issue.

Currently 150 million are spoken for, principally by St Andrew Investments Ltd which will own 60.31 per cent of Jetcon after the IPO.

St Andrew Investments Limited is a private company incorporated in Jamaica and 100 per cent owned by Andrew Jackson and Gillian Jackson.

Applicants for the offer must request a minimum of 5,000 ordinary shares, and applications above this amount must be made in multiples of 500.

Jetcon saw revenue of $523.25 million in 2015 up from $349 million in 2014. Gross profit was $50.61 million in 2015 with a net profit margin of 7.1 per cent. Gross profit was $129 million in 2014, with a net margin of three per cent.

Jetcon will use the funds raised to expand operations, take advantage of business opportunities and lower costs by enabling it to buy in larger volumes, the prospectus said. It notes that both buildings and stock are insured.

If the company is admitted to the Junior Market, the directors are offering an annual dividend of up to 30 per cent of net profits subject to the need for reinvestment, the prospectus states.

 

Source:
BY AVIA COLLINDER
collindera@jamaicaobserver.com
Business reporter 
Jamaica Observer
Wednesday March 9, 2016    

http://www.jamaicaobserver.com/business/Jetcon-to-raise--96-million-in-March-IPO_53996