Insurance giant, Sagicor Group Jamaica, SGJ, is set to stanch multibillion-dollar losses on its investment hotel portfolio of 20 million shares in international hotel chain Playa Hotels and Resorts, held through several of its associated companies Sagicor Real Estate X Fund and Jamziv MoBay Jamaica Portfolio Limited. Sagicor announced this past week, the sale of its entire block of Playa stocks at US$5 per share for roughly US$100 million or more than J$14 billion.
Ten million shares are being disposed of as part of a Playa public offer, 8.5 million will be sold directly to parent company Sagicor Financial Corporation and confirmation reached the Financial Gleaner on Friday that the remaining nearly 1.5 million shares will be taken up by the underwriters of the Playa offer.
Playa trades on the Nasdaq exchange and has put up 25 million of its ordinary shares in the offering, which is being underwritten by Deutsche Bank Securities, Bank of America Securities, Citigroup and Nomura, which are acting as joint book-running managers for the offering. The proceeds to Playa will be used to pay off debt and for corporate purposes, Playa informed the market on January 6. The transactions are expected to close on Monday, January 11.
The share sale money, SGJ president and CEO Christopher Zacca says, will be deployed almost entirely into new property investments. A total of US$91 million will come from the public offer and over US$7 million more will come from the portion to be taken up by the underwriters. They will pay the general offer price. The price to Sagicor Financial is US$5 less commission expenses associated with the offer.
“That’s nearly US$100 million to spend on real estate for Jamaica’s benefit. We are going to deploy that in commercial real estate investments over the next year to 18 months,” Zacca told the Financial Gleaner in an interview.
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