Jun 2017 Financial News

Cable Bahamas makes landmark listing on JSE with million-dollar shares

Jun 05, 2017

Telecommunications company The Cable Bahamas Ltd (CBL) created history on Friday by becoming the first Bahamian company to cross list on the Jamaica Stock Exchange (JSE), both on the US dollar market and the Main Market. The company listed 4,090 Series 11 preference shares at eight per cent fixed rate on the US dollar equities market at a price of US$1,000 per unit; and 1,349 of the Series 11 eight per cent index fixed rate preference shares on the Main Market at $1 million per share.

Both listings, totalling 5,439 shares and $1.9 billion in investments (US$4.9 million and $1.35 billion), will mature on June 30, 2030.

With the listing, CBL became the 35th company to list on the Main Market and fifth on the US dollar-denominated market, increasing to 66 the companies listed with the JSE overall. It also increased the number of securities being traded on the JSE to 88.

Managing director of the JSE, Marlene Street Forrest, underscored the importance of the listing, especially as a signal to “others within the region to see that there can be [opportunities for] listings and cross listings and dual listings”, thus enhancing the investment profile of the Caribbean region.

The JSE managing director also explained that “having listed on The Bahamas Stock Exchange and/or any other exchange in the Caribbean, it is easier to list on the JSE”.

Rather than undertaking an initial public offering (IPO), CBL, with the aid of its sponsoring broker Scotia Investments Jamaica Ltd (SIJL), was “introduced” to the Jamaican trading platform after raising funds through an “initial private placement”. The investment firm was also responsible for putting together the application of the preference shares and submission to the Financial Services Commission and the JSE, according to a release.

“I'd like to remind everyone that the stock exchange is available. We want to work with the companies, we want to work with our brokers who want to take companies to market and we want to encourage more of our brokers to go outside of our shores to have companies list and cross list… our doors are always open,” Street Forrest stated.

SIJL CEO Lissant Mitchell shared similar sentiments, saying: “For other potential companies, whether they are in Jamaica or anywhere in the region, we have the capacity to and we have the capabilities to manage your fund-raising. For the investors, of course we have a wide footprint and we can provide guidance along that line [of investing in new companies].

He attributed the listing of the preference shares to Scotia Investments' presence in the Caribbean and the company's “deep relationship with Cable Bahamas”.

“We have a really strong footprint across the region and as a result it allows us to bring the best value to our clients – both clients who are in the market to raise funds as well as clients who intend to invest because it's a two-way street,” Mitchell asserted, adding, “it's a landmark opportunity for the stock exchange, for Cable Bahamas and certainly for Scotia Investments.”

CBL began operations in 1994 in The Bahamas by providing cable TV service. In 2005 it added broadband internet service to its product offering and by 2011 became a triple play service provider after augmenting fixed line voice service to its portfolio.

The year 2013 proved a monumental year, according to CBL Chief Operations Officer John Gomez, as the company expanded into the US market, purchasing a group of telecommunications companies in Florida. And, in 2016, the company became the second holder of a mobile licence in The Bahamas. Gomez said that CBL's listing is an indication of “the confidence that the Jamaican investors have placed” in the company “to deepen our relationships within the region” and expand the business.

On August 31, 2016, CBL raised Bahamian $16,775,862 through an ordinary share issue and Bahamian $42,735,338 through sale of preference shares. For the quarter ended December 2016, CBL recorded 22-year-high revenue of Bahamian $180 million, with profit before tax of Bahamian $43 million.

“It's a strong company with a very strong brand… and I think this particular opportunity, where a new company is coming in to challenge an incumbent mobile operator, is one that will have a lot of resonance with Jamaicans because they would have seen a similar scenario in Jamaica, and I think they will quickly appreciate the potential that an opportunity like that has,” SIJL Vice-President – Origination and Capital Market Dylan Coke told the Jamaica Observer in an interview after the listing ceremony.

The vice-president explained that SIJL found it a worthwhile endeavour to broker the company's listing. He said that CBL becoming the second holder of a mobile licence in The Bahamas is a “once in a lifetime opportunity”, since research showed that the country is one of few countries in the world that has mobile provider monopoly.

“Being able to do a transaction like this – a preference share, listed on the JSE, for an overseas issuer - is further evidence of the depth and sophistication of Jamaica's capital markets,” Coke is quoted in a release.

Source:
BY JOSIMAR SCOTT
Observer writer
Jamaica Observer
Sunday June 4, 2017

http://www.jamaicaobserver.com/sunday-finance/cable-bahamas-makes-landmark-listing-on-jse-with-million-dollar-shares_100786?profile=1056