Apr 2008 Financial News

CCMB shareholders end up with smaller stake in CCFG

Apr 09, 2008

Minority shareholders of Capital and Credit Merchant Bank (CCMB) who held just over 27 per cent of the bank will find that they own a smaller stake - 22 per cent - of Capital and Credit Financial Group (CCFG) after the restructure scheme.

The scheme of arrangement was sanctioned by the Supreme Court on Monday after receiving majority approval by shareholders two weeks before to allow the financial institution to allot and issue six ordinary shares in CCFG for every five ordinary shares held by these stockholders in CCMB.

CCMB will then issue "42,743,978 CCMB Cumulative Redeemable Preference Shares with a value per share of $2.00 by capitalising the sum of $85,487,956 being part of the amount currently standing to the credit of the Bank's unappropriated profits", accrording to the bank's statement to the Jamaica Stock Exchange yesterday.

While the preference share issue will provide a small dividend for minority shareholders, who prior to the restructure held 27.2 per cent of CCMB, they will now own 22.38 per cent of CCFG.

What appears to be a reduction in the stake held by minority shareholders is really the cost of bringing all the assoicated companies and subsidiaries under one company that will be owned by the shareholders and the group.

For instance, prior to the arrangement Capital and Credit Remittance did not fall under CCMB but was fuly owned by the group company. Similarly, prior to the arrangement only 20 per cent of Capital and Credit Holding Incorporated (the parent of US brokerage CCII, was held by CCMB. Now the shareholders will have a stake in that entity as well.

CCII provides a suite of products, including bill payments, fixed income tradeing, equities and other seucirites opeating in south Florida.

Over the medium to long-term, CCFG plans to expand the US brokerage to other US locations with a significant population of the Caribbean region, such as in New York City area.
They expect that CCII will generate in excess of US$1.5 milloin in revenues by 2010.

Source:
The Jamaica Observer
Wednesday, April 09, 2008

http://www.jamaicaobserver.com/magazines/Business/html/20080408T220000-0500_134340_OBS_CCMB_SHAREHOLDERS_END_UP_WITH_SMALLER_STAKE_IN_CCFG.asp