Derrimon Trading seeks millions to refinance debt
Published:Tuesday | March 20, 2018 | 12:00 AM
Derrimon Trading Limited will be seeking to raise $250 million with the option to upsize to $350 million in its preference share offer that it will use to refinance debt.
The offer opens on March 26 and closes on April 9. The company will issue 125 million units at $2 per share, carrying interest rates at 9.0 per cent for the first two years, and 2.50 per cent above the average treasury bill rate in year three. The preference shares are redeemable on March 31, 2021.
The funds raised will go mainly towards paying out an existing preference share offer that expired earlier this month. The remainder of the funds will go towards general corporate purposes, according to the prospectus.
Earlier this month, share-holders in Derrimon met to enact a number of resolutions which would pave the way to allow for the offer to be made. Share-holders at the extraordinary general meeting approved a resolution for the creation of an additional 400 million shares, to 800.4 million units. Shareholders also voted to designate the newly created capital as redeemable preference shares and granted the Derrimon board the authority to issue those shares from time to time. Derrimon's capital structure now includes 275.4 million ordinary shares and 525 million redeemable preference shares.
The existing three-year 11.75 per cent preference shares matured on March 12. The 125 million shares which traded on the Jamaica Stock Exchange were valued at just under $269 million.
Derrimon could choose to redeem the expired offer with cash or through a new share issue. The latter option thus saved the company cash and also will take advantage of preference shares at lower rates.
For the year ending December 2017, Derrimon reported group revenue of $6.35 billion and net profit of $204.3 million, some of which resulted from gains from the takeover of Caribbean Flavours & Fragrances Limited.
Derrimon also restructured its debt in 2017, which saw savings going to the bottom line, while reducing borrowings from $844 million to $747 million year-on-year.