Campbell
THE HOLDING company, which controls Capital & Credit Merchant Bank, has been valued at around $662 million, as the National Insurance Fund is poised to buy a 27.2 per cent stake in the banking group.
Negotiations are said to be at an "advanced stage" for the acquisition of the existing stake held by textile company, Davon Corporation.
It emerged last week that 27.2 per cent stake in Capital and Credit Holding Limited was set to be acquired by the National Insurance Fund (NIF) for approximately $180 million, which would value the group at around $662 million.
The deal is presently awaiting Ministry of Finance approval and is expected to be given the green light within weeks.
The NIF manages investments made on behalf of pensioners in the National Insurance Scheme (NIS) and has accumulated funds in the region of some $14.6 billion.
Existing shareholders appear not to have exercised their "pre-emptive" rights to match any offer put forward by a potential buyer.
The remaining shares are controlled by Capital & Credit group chairman Ryland Campbell, who has a similar 27 1/4 per cent stake through the WestStar Group of Companies. Other main investors are the Jamaica Broilers Group, which holds a 20 per cent shareholding, and Capital & Credit Merchant Bank chief executive Andrew Cocking with a 17 per cent stake.
In November last year the Financial Gleaner revealed that Davon was anxious to sell its interest in Capital & Credit as it moved to revamp its garment operations. The garment company was hit hard by troubles at the parent company of Fruit of the Loom, the popular US clothes company and Davon client.
Davon president Bill Ching was unavailable for comment yesterday.
Capital & Credit has proved to be one of few success in the local merchant banking sector in recent years.
Under the stwardship of group president Ryland Campbell and Merchant Bank chief executive Andrew Cocking, the consolidated group has a net worth of approximately $600 million.
Mr. Campbell said this week that the net worth of the group was at close to $600 million but from a "market value perspective it was over $1 billion".
Capital & Credit Holdings comprises of three wholly owned subsidiaries, namely the flagship Merchant Bank, run by Andrew Cocking, Capital & Credit Remittance and the recently formed Asset Management arm, which will be headed by Errol May, former vice president at Dehring Bunting & Golding.
This new arm will deal with fund management and financial investment advice and will formally open for business on July 3.
Mr. Campbell said: "It is no secret that we have been seriously considering going public. When the Bank was formed in 1994 we had a five year plan, which concentrated on growing the bank. At the time the market conditions were not conducive to going to the capital markets.
"At the beginning of this year we formed another five year plan which sees us going public during the first quarter of 2001. With the tax on dividends due to be cut and eventually eliminated over the next two years this is a good time to go to the capital markets."
The executive said: "If you wait until the tax has been eliminated then it becomes an expensive proposition. There is ample evidence that the financial climate is looking good for companies going to the capital markets as long as they have a good track record, although I think new initial public offers (IPO) will perhaps struggle a bit initially.
