Sagicor seeks US multimillion-dollar investment
Published:Wednesday | February 9, 2011 | 12:00 AM
Sagicor Financial Corporation (SFC), parent company of Sagicor Life Jamaica on Monday announced that it is in discussion with International Finance Corporation (IFC), to invest up to US$100 million in the company.
It was not immediately clear what stake IFC would take in the company but the notice said it will be in the form of common and preferred shares.
The investment though, is still subject to the successful completion of negotiations between the institutions and necessary approvals, including that of the appropriate regulatory bodies and shareholders of Sagicor.
If an agreement is reached however, existing shareholders will have an opportunity to participate in the purchase of additional shares.
But it was not immediately known how much shares would be available for purchase.
Neither was it clear how much shares would be transferred to IFC with the investment.
IFC is the the arm of the World Bank that provides investment and advisory services to the private sector of developing countries.
Just last year July, it also forged an agreement to pump US$75 million into Sagicor's biggest competitor Trinidad-base Guardian Holdings Limited.
That investment gave IFC approximately 12.8 per cent or 29,695,313 of Guardian's common shares outstanding.
Long-term capital
For Sagicor a successful agreement with IFC would provide it with additional long-term capital to pursue its regional growth strategy.
"...we are hoping it will come to fruition as the investment will help to strengthen our ability to expand our reach within the region," said Richard Kellman, chief operating officer of SFC.
"As you know we are present in several regions, some dominant others not so, so there is a lot of scope to increase our reach and penetration within the region," he said.
Sagicor is one of the largest insurers operating in the Caribbean region. At the end of September 2010 it had total assets of US$4.9 billion and total equity of US$744 million.
Revenues for the nine months up to September remained flat compared to 2009 amounting to US$908.7 million.
SFC Group offers life, health, property and casualty insurance, as well as annuities, pensions and mutual fund products in 22 countries throughout the Caribbean, the United States and the United Kingdom.
Of its total revenue the Caribbean accounts for 51 per cent, UK 37 per cent and the USA 12 per cent.
It is a dominant player in the individual and group life and health insurance in Barbados, Jamaica and the East Caribbean region, and a significant provider in the Trinidad and Tobago market, but provides services to a lesser extent in other Caribbean markets.
Through its Jamaican subsidiary, Sagicor Life Jamaica, the group is now positioning to enter the Latin American market, starting with Costa Rica.
In addition to the immediate investment of US$100 million, the discussion between Sagicor and IFC will also explore other strategic business opportunities.
But Kellman could not be drawn on additional details.
However, IFC documents states that in the long run, such a partnership can also encourage product innovation by providing the company with evolving, growing, and increasingly sophisticated investment solutions.
It will also provide an avenue for further investment in the company to implement its business plan and grow its business.
"As we celebrate our 170th anniversary of service to the region, we at Sagicor see this proposed relationship with IFC as a very timely and exciting initiative," states Dodridge D Miller Group president and chief executive officer, of Sagicor Financial Corporation in a statement released on Monday.