FJI-Pan Jam merger finalised
Published:Friday | August 5, 2011 | 12:00 AM
First Jamaica Investment's J$14.5 billion in assets and shares were fully absorbed into realtor parent company Pan Jamaican Investment Trust Wednesday, following a successful court ruling backing the scheme and earlier shareholder approval, according to a directors' release.
Shareholders are expected to see the share swap reflected in their holdings in newly issued Pan Jam units by Monday, subject to approval by Jamaica Stock Exchange (JSE). First Jamaica shares ceased trading on Wednesday on the JSE.
"Now that the scheme has been completed and First Jamaica has been amalgamated into Pan Jam, the integrated management team can now refocus their energies in building stockholders in one company and extracting synergy from the amalgamation," said Stephen Facey, CEO of both Pan Jam and First Jamaica, in a release to the JSE this week.
Greater efficiency
The amalgamation is aimed at greater efficiencies at both companies.
Since 2005, when First Jamaica sold its insurance and banking operations to Sagicor Life Jamaica, it has been operated primarily as an investment holding company similar to Pan Jam.
Both companies share common offices and staff and the majority of directors are common to both. Pan Jam currently owns 83 per cent of the issued ordinary stock units of First Jamaica.
The share swap proposes that First Jamaica will receive shares in Pan Jam at the rate of 10 Pan Jam shares for every 13 First Jamaica stock units.
Pan Jam shares traded down J$1.29 Thursday to J$53.51.
The Supreme Court of Jamaica on July 27 "sanctioned" the amalgamation of First Jamaica into Pan Jamaican Investment Trust. At an extraordinary general meeting of Pan Jam, held on June 23, summoned to consider the scheme and "stockholders voted unanimously to approve the scheme with 279,693,448 votes cast in favour of the scheme and none against".
The company filed its court order with the Registrar of Companies on Wednesday which would, it said, "immediately" resulted in: all First Jamaica stock units except two such First Jamaica stock units namely - one held by Pan Jam and the other by the secretary of Pan Jam in trust for Pan Jam shall be cancelled and extinguished; all of the property, assets and undertaking of the First Jamaica and all its debts and obligations of whatsoever kind will be transferred to, and assumed by, Pan Jam.
The cost of the amalgamation was anticipated at J$20 million, amid legal and consultant fees and stamp duty. Facey said previously that he expects "payback in less than two years". The amalgamation will not result in job losses, the company said.
The amalgamation will be done via a share swap and will increase total shareholder equity significantly at Pan Jam, from its current J$10.6 billion to include First Jamaica's larger J$13.4 billion. The size of the capital base of the merged operations was still not immediately clear.
First Jamaica's 303.5 million shares will be delisted and the company dissolved, following the completion of the transfer of assets and liabilities.