Proven exits ‘bittersweet’ Dream Entertainment investment
Share sale said to have been decided in June
Published:Wednesday | September 8, 2021 | 12:07 AMHuntley Medley/ - Associate Business Editor
Proven Investments Limited, PIL, announced to the market on Monday that it has sold its 20 per cent stake in Dream Entertainment, a business that has attracted some controversy following the recent staging of its signature annual event, the Dream Weekend party series in the resort town of Negril, and the parallel rise in COVID-19 infections, hospitalisations and deaths in the country and the western belt in particular, since then.
However, Christopher Williams, president & CEO of Proven Management Limited, told the Financial Gleaner on Tuesday that the disposal of the 2,500 shares to Yes Iyah Limited was concluded in June, months ahead of the Negril party. Proven Investments is managed by Proven Management.
“It’s a bittersweet moment for us,” Williams said.
The transaction is said to have recouped the initial investment of roughly US$500,000, which PIL paid for the Dream shares in February 2019, just one year before the COVID-19 pandemic, which has occasioned the shuttering of the entertainment sector for more than a year before its temporary reopening with strict conditionalities in late July.
“We broke even,” Williams said of the transaction value.
He is also dismissing any notion that the disposal of the Dream shares is related in any way to the public brouhaha about the staging of the party. It is not an indication, he insisted, of any pessimism about the long-term financial outlook for the entertainment sector or Dream Entertainment Limited.
“Our company went through a strategic review in April and realised that we were stretching ourselves too thin from a management standpoint and we needed to redesign our portfolio so that we could keep our eyes on all the balls. So, we made the decision to exit our smaller investments,” Williams said.
He added that PIL has sold its interests in other privately held small companies, which he did not name.
GUIDANCE ON GOVERNANCE
Williams said PIL’s management had been integrally involved as board members in providing guidance on governance arrangements and accountability in the running of Dream Entertainment, which had been listed as a PIL associated company.
While PIL had invested US$570,000 in the entertainment business, Williams noted its small size when set against the size of PIL’s balance sheet, which is in the region of US$700 million. At the time of the acquisition, Proven said its purpose was to generate dividend income. While not commenting on the dividend returns realised during the short period it held the equity stake, Williams expressed confidence in the ability of entertainment sector to bounce back from the pandemic.
“We recognise that the world will return to entertainment, which is a critical necessity for human beings. So, it is not if, but when, it will return. The Dream brand is strong and will survive. We worked with these guys and they are incredible professionals who are helping to build Brand Jamaica. At the end of the day, our confidence in the entertainment business, and in Dream in particular, is extremely strong,” Williams said.
Meanwhile, Williams is describing the criticisms levelled at the Dream Weekend party as unfortunate.
“At the end of the day, Dream is a business, and once it’s operated according to the laws of the country then you can’t look to blame the business. If the laws say you can host a party and you host party, the business is operating according to the laws,” he stated.
At the time of acquiring the Dream Entertainment shares over two years ago, Proven advised the market in a Jamaica Stock Exchange filing that it did not intend at the time to acquire control nor majority shareholding of the entertainment business.
The purchasers of Proven’s Dream stake, Yes Iyah Limited, is described as a Jamaican private company whose directors and principals are Ryan Reid, Michael Banbury and Sean Shelton.
Dream Entertainment, which is led by Managing Director Scott Dunn, is also the creator of the Xodus carnival band, which, pre-pandemic, hosted a series of parties and costumes for the soca season, in partnership with one of Trinidad’s premier carnival bands, YUMA or Young Upwardly Moving Adults.