Massy reorganises, hunts capital in Ja
Published:Friday | January 28, 2022 | 12:08 AM
After prospecting a number of markets, including in the United Kingdom and the United States, regional conglomerate Massy Holdings Limited has settled on the Jamaica Stock Exchange, JSE, to partially satisfy its need for capital to pursue its growth strategy. Massy, with a market capitalisation of US$10.49 billion, cross-listed its 98.97 million shares on the JSE main market on Thursday.
The group is widening its footprint in the regional equities investment market, even as it closes out a corporate restructuring to make it a leaner, more profitable business.
Company President and Group CEO Gervase Warner is leading the Massy overture to Jamaican investors, complete with heavy local media advertising. Speaking with the Financial Gleaner ahead of the January 27 listing, Warner made no secret of his mission to broaden ownership and find a good place to hunt for capital to fund the company’s growth.
“As we embark on our international growth plans while we are fairly rich, from a capital perspective, with a low debt-to-equity ratio, we are hunting for significant opportunities. And at some point we will need to raise capital, and we feel that the JSE would be a very good place to do that,” Warner said.
He added: “We like the enthusiasm and the energy with which the (Jamaica) stock exchange is run and the broader retail participation, in that regular persons are more interested in stock investments in Jamaica, compared to other jurisdictions.”
Describing Massy is a strong company with a healthy balance sheet and a good track record, Warner conceded that trading of the stock on the Trinidad and Tobago Stock Exchange, TTSE, where it is listed, has not been as active as the company would like, since much of the shares are held by institutional investors.
“Because our shares are largely held by institutions in Trinidad, we don’t get as much liquidity coming to the market. We are hoping that with this cross-listing there will be greater liquidity, greater interest, and maybe price discovery,” Warner noted.
Massy traded on the TTSE up to Thursday this week at TT$106, or about $2,400. Warner believes that in order to present an attractive value proposition to Jamaican investors, the company will be doing a 20:1 stock split. Warner says this will allow more Jamaican investors to participate in Massey, thus broadening ownership. Massy’s shares were cross-listed on the JSE at the TTSE closing price of TT$105.92, coming from a 52-week high of TT$109.98. (TT$1=$22.99).
Massy Holdings is in the final phase of a reorganisation which started in 2018. Companies such as Illuminat and Massy Insurance are either in the final throes of being sold off or are no longer with the group. According to Warner, the conglomerate’s structure now rests on three independently run portfolios – integrated retail; motors and machines; and gas products. Warner said the paring-down aspects of it operations is to eliminate drag on the conglomerate’s revenue and profit. Nearly a half of the company’s disposed holdings represented a long tail that hindered growth, he conceded.
Warner noted that while Massey is looking for growth, there are no immediate plans to expand the Jamaican operations. However, operations at Massy Gas, GasPro and Massy Distribution, formerly HD Hopwood, will be bolstered by deeper market penetration and the strengthening of operations. Warner foresees greater expansion in other markets of the Caribbean and Latin America.
For the Massy listing, Barita Investments is co-lead broker with Trinidad’s First Citizens Investments. Vice-President for Investment Banking at Barita Terise Kettle said that as early as May 2021, when Massey made it clear that they wanted to list on the JSE, Barita entered a partnership with First Citizens to submit a joint proposal. Kettle said the Massy cross-listing fits well with Barita’s growth strategy.
“Massy is a large investment holding company, and we want to get an opportunity to work with like-minded companies such as Massey. Like us, they are big on growing their footprint globally. That, for us, makes good sense,” Kettle pointed out.
She added that Barita is aggressively looking in the market for those opportunities to drive the expansion of the company’s footprint regionally and globally.