Spaulding
Andrew Green, Staff Reporter
FINAL WORD on the RJR Communications Group rights issue is expected next week, says the attorney and company secretary and Stephen Greig.
Shareholders at RJR's annual general meeting last month voted to create an additional 72.5 million ordinary shares. Existing shareholders were offered the right to buy 57.5 million of the shares in a special offer which closed on Monday.
The applications are still being collated, Mr. Greig said on Friday. He said that by next week the process should have been finalised.
"There was a very good reception for the rights issue," said FirstGlobal Stockbrokers research manager Dean McDonald. "I suspect they would have met their goal."
That goal was to raise $259 million. The money is intended to pay down debt, fund capital development and provide working capital to support the company's expansion programme.
"It seems to have been well taken up," JMMB Securities investment analyst, Doyle Smith, said. "It was a reasonably good issue."
INTEREST IN RJR INCREASED
Interest in RJR, which is headed by Lester Spaulding, has been substantially increased since billionaire Michael Lee Chin decided to take a stake in the company, Mr. McDonald said.
Bank of Nova Scotia acted as the central collecting agency for the rights issue, with the stockbrokers also serving their clients. The applications were being processed by Scotia Jamaica Investment Management Limited.
Each shareholder got the right to buy one of the additional shares for each five already held at a price of $4.50. Shares which are not taken by the rights holders are put in a pool, from which other shareholders are able to purchase up to a maximum of 10 per cent of the total shares in the company.
"The company had a rough year putting in new studio," Mr. Smith said. They were running two at the same time and the result is that their costs have been high.
The immediate impact of raising the money is that RJR would cut their debt, Mr. McDonald said. "If not all the debt is removed then a significant amount should be paid down."
The company took on about $240 million in debt and reducing that will significantly cut interest expenses, Mr. McDonald said. "That will have an immediate impact going into 2005."
Mr. Smith said, "Next year should be better for RJR."
