ISLAND LIFE Insurance Company has been delisted by the Jamaica Stock Exchange (JSE).
The delisting became effective the evening of Friday, October 24, 2003. According to officials at the JSE, the delisting was a result of the merger between Life of Jamaica (LoJ) and Island Life Insurance Company.
"This delisting is part of the normal course of business," said president of LoJ, Maxine MacLure. "It is not a negative thing."
OUTSTANDING SHARES
LoJ had acquired all of the outstanding shares of Island Life on March 31, 2003. According to Ms. MacLure, the board of Island Life subsequently requested the delisting. Sagicor, the Barbados based parent of LoJ had bought the majority of Island Life shares from the Financial Sector Adjustment Company (Finsac) in December of 2000.
"By January of this year, we owned 90 per cent of Island Life," Ms. MacLure said. "We then began the process of acquiring the
other 10 per cent from the minority shareholders and this was completed by June of 2003."
"The process was finally approved by the JSE and effectively, on Friday there were no more Island Life shares to trade," she said.
In exchange for their Island Life shares, the minority shareholders of the company were offered LoJ shares. For every one share of Island Life, minority shareholders were given four and one quarter LoJ shares.
MacLure informed Wednesday Business that, 524,030,334 LoJ shares were issued to all the shareholders of Island Life.
Minority shareholders received 30,600,000 shares, Finsac was issued 79,560,000 shares and Sagicor was issued 413,870,334 shares.
SHARE SWAP
The result of this share swap, according to MacLure, was that the issued shares of LoJ increased from under 2 billion to nearly 2.5 billion or 2,497,284,390. However, only 2,182,801 shares are traded on the JSE. According to the LoJ Interim report to Shareholders for the Six Months ended 30th June 2003, "the LoJ shares carried a nominal value of $0.10 per share but were exchanged at a value of $2.95 per share."
As at the close of trading Tuesday, October 28, 2003, LoJ shares traded at $3.49.
Now that the delisting has occurred, the next step is to merge the companies under the brand of LoJ.
However, until the Financial Services Commission has approved that merger, the two insurance companies will continue to exist.
Said MacLure, "Island Life still exists. But all the expenses and profits flow to LoJ. It is a wholly owned subsidiary of LoJ."
TOTAL SURPLUS GREW
As revealed by the Interim Report, "the company's total surplus grew by 124 per cent over the six months to $3.4 billion, due in part to the purchase of Island Life by way of an issue of LoJ shares. The performance of the quarter reflects an annualised return on equity of 42 per cent. The post acquisition net earnings of Island Life were $46 million."
This was included in LoJ's profits of $519 million for the six months ended June 30, 2003. Total assets of the LoJ group at the end of the June 2003 period amount to $11 billion.
MacLure told Wednesday Business that the application to the FSC for merger was submitted during September of 2003.
"The process is now in the hands of FSC and we hope for approval by year end," she said. To some extent, this is a legal formality as the operations of LoJ and Island Life have already been merged.
"After the effective merger, there will be no change to the policy holders," MacLure said. "The operations of Island Life are currently being administered by LoJ, as set out in an agreement by the two firms. But because of insurance regulations, we keep separate book and separate accounts for the two companies."
