Susan Gordon, Business Reporter

Left: Paul Scott, deputy chairman of Mussons Jamaica Limited and director of Seprod. Right: Byron Thompson, Seprod group managing director. - File photos

Seprod Limited is to sell its 50 per cent shareholding in Gatcombe Investments Limited to Musson Jamaica Limited by October 2.

The basis of the sale said director of Seprod, and deputy chairman of Mussons, Paul Scott, is to allow Seprod to concentrate on its core business of manufacturing and explore the export opportunities for its brands.

The deal with give Mussons total ownership of Gatcombe, a company with a value of US$40 million, (J$2.76 billion), the Financial Gleaner understands.

Scott declined to mention the transaction price, but indications are the deal was sealed at more than one billion dollars.

"We wouldn't dispose of it below value," chief executive officer and group managing director of Seprod, Byron Thompson, told the Financial Gleaner.

Transaction approved

On that basis, Seprod is likely to have received a cheque for US$20 million or approximately $1.4 billion for its stake in Gatcombe.

Seprod's board approved the transaction Monday.

Gatcombe Investments Limited is the arm of Seprod's business in charge of merchandising and distribution of telecommunications and pharmaceutical products in Jamaica, most of the Caribbean and as far as Europe.

Thompson said, up to two years ago, the business accounted for 40 per cent of Seprod's profit.

"It's a good business," he commented.

Explaining one of the reasons for the disposal, Thompson said the business had been expanding into various countries where the jurisdiction and accounting systems were different, posing several difficulties in preparing financial statements at required periods.

It was only a few months ago that Seprod, a publicly listed company, was barred from trading on the Jamaica Stock Exchange (JSE) for failing to turn over its audited accounts on time to that regulatory body.

It would have been issues like that presented by Gatcombe that were responsible for, or at the very least contributed to the hold up.

"So a business like that should be unscheduled," said the Seprod CEO.

"It's a developing business, especially with the telecommunication entities being in a growth phase."

Scott, meantime, acknowledged that the Gatcombe deal showed good financial returns for Seprod, and seemed to be a good move, strategically.

"Facey Commodity is not its core business so now the company can focus on tremendous export opportunities for its very strong brands," Scott told the Financial Gleaner.

Facey Commodity Company Limited is jointly owned by Seprod and Musson. It is a major distributor of consumer products and pharmaceuticals, and the sole distributor of Digicel phones in the Caribbean.

"We are in the cash; we are in a better position," Thompson concurred.

"We are looking to strengthen our core business and to broaden our manufacturing base."

susan.gordon@gleanerjm.com