Cargo Handlers IPO priced at J$12.50 per share
Published:Wednesday | December 1, 2010 | 12:00 AM
Businessman Tony Hart will be going to the market Friday with an offer of J$12.50 per share for his port company Cargo Handlers Limited, but has confined the float to 8.3 million share units or less than 18 per cent of the company's authorised capital of 46.62 million shares.
Hart, the company's chairman, is seeking to raise J$53.549 million from the offer, including J$38.99 million from the public which will be offered 3,119,344 million of the shares; another $10.4 million for directors, managers and other employees, who will get priority access to 1,039,826 units at a discounted price of J$10 per share.
The remaining 4,159,170 shares are issued at J$1 per share to be placed in trust - the Cargo Handlers Trust - established on October 4, 2010 to benefit the stevedores, who will earn dividend paid on those shares.
Cargo Handlers, which is run by chief executive officer and company director Mark Hart, is a Montego Bay-based operation in the business of handling bulk and containerised cargo - specialising mostly in cement, steel and lumber - which brings in an annual revenue of more than J$170 million.
The company is valued by assets at around J$81 million, but its current assets far outweighed current liabilities, creating negative working capital of J$33.7 million, at yearend September 2009, according to the latest data available.
The largest portion of current liabilities is a J$63 million debt owed to directors.
The company is profitable, with net income steady at around J$1.4 million in the past two years.
The equity capital raised will fund the lease of a property for Cargo Handler's expansion at Montego Freeport, alongside Berth 2 to increase capacity, and to purchase a 20-ton forklift and a shore crane to increase 'lift-on lift-off' cargo operations, as noted in the prospectus.
The initial public offering will be open for one day, from 9 am to 4:30 pm on December 3, the prospectus says.
The shares are to be listed on the JSE Junior Exchange within a month of the IPO.
It is the second most expensive of the junior listings, behind Access Financial whose stock was priced at J$18.34.