The Tribune

• $10m preference share issue oversubscribed

• To fund renewable energy, generation move

• Company to be ‘much different’ in ten years

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

FOCOL Holdings will retain some of “the oversubscription” on its recent $10m preference share issue, its chairman telling this newspaper: “In our minds we will not go past $12m”.

Sir Franklyn Wilson, in a recent Tribune Business interview, said the BISX-listed petroleum products supplier will tap the capital markets for financing more frequently than it has done in the past five years as it invests “in new equipment and initiatives”.

Declining to provide details on what these are, he added that FOCOL Holdings will be “significantly different ten years from now” as it seeks to exploit “more and initiatives and opportunities are lining up”.

Confirming that the company’s recent $10m preference share offering, priced at a six percent annual interest rate and due to mature at end-June 2030, was oversubscribed, Sir Franklyn said: “We will probably not take all of the oversubscription. We’re not going to take more than we think is prudent.

“We asked for $10m, and may go up to $11m. It appears that the oversubscription was in excess if that, and in our minds we will not go past $12m.” CFAL acted as the financial adviser and placement agent to the offering, which was placed over just two to three days in late May 2021.

One capital markets observer, speaking on condition of anonymity, described the six percent interest coupon as “a bit thin” compared to the returns investors can get on other securities issues and assets in the present climate.

They added that FOCOL Holdings had informed investors that the offering’s proceeds will be used to finance the company’s expansion, and diversification, into other industries, principally power generation and the renewable energy sector.

Sir Franklyn did not confirm this or go into details, merely saying: “FOCOL continues to grow and prosper despite the uncertain climate. FOCOL is investing a fair amount of money in new equipment and new industries, and this is basically for that purpose. We bought some engines for the production of electricity. That’s an example of what we’re talking about.”

Those engines are currently being employed at Bahamas Power & Light’s (BPL) Blue Hills generation plant, and he added: “We decided to go to the capital markets rather than deal with the commercial banks because this is a longer term play not a short-term play. Let’s just say we are on a capital expansion programme and new initiatives, that’s the best way I can put it. 

“The world is changing, and as the world changes we have got to stay ahead. I cannot go into detail, but we have to change with the times. The new initiatives are designed to continue the transformation of FOCOL. FOCOL did not reach its current status and standing accidentally. 

“During the chairmanship of the late Sir Albert Miller, we went from a trucking company in Freeport to what we became after the Shell deal. That’s a serious transformation; a big step up. We continue to transform, and think the company will be significantly different ten years from now than it is today. That’s a process; not a one-stop thing,” Sir Franklyn continued.

“Sometimes we will go to the capital markets for funding, sometimes we will go to the banks. The country is in the process of changing, and we’re going to be more active in the capital markets than we have been in the last five years because we have more initiatives lined up, and have more and more opportunities.

“It depends on which of the opportunities we decide to pursue. We’re not going to do everything that comes our way. We’re going to make choices. The directors are a very steady and cautious Board. We’re not going to do everything that comes our way, but we’re going to go to the capital markets for some.”

Sir Franklyn said FOCOL Holdings’ strong track record will stand the company in good stead when it comes to future capital raisings, adding: “The pricing on this [issue] reflects that the market has a high degree of confidence in FOCOL.

“We’ve been able to raise money with a dynamic other companies cannot in terms of the rate, the tenor. It’s just confidence in the company. We’ve not missed one quarter’s dividend in more than 20 years despite hurricanes, pandemics and everything else.”