Site logo

Financial accounts for itel overhauled, says key investor Portland

Outsourcing Management Limited, which trades as itel, recently overhauled its books following concerns raised by key investors.

The disclosure was made on Tuesday by one of those investors, equity fund Portland JSX Limited, which is operated by Portland Private Equity.

Portland’s Managing Partner, Douglas Hewson, said the accounts at the outsourcing company were not in keeping with acceptable standards, but they were overhauled and corrective action taken.

“Earlier this year, the company discovered that in the process of producing the management financial reports, certain manual adjustments were made that resulted in the final statements not reflecting accurately the financial position of the company,” Hewson said, in response to questions from the Financial Gleaner, after revealing the reorganisation at Portland JSX’s annual general meeting.

Founded by CEO Yoni Epstein, itel started in 2012 with seven employees but has grown its footprints into multiple markets, some of it financed by capital from investors. Portland Private Equity and Pan Jamaica Group Investment Limited each took a 15 per cent stake in Outsourcing Management in September 2019. Portland JSX, which is a listed entity, co-invests with Portland through its Caribbean Fund.

Headquartered in St Lucia, the business process outsourcing company has operations in Jamaica, The Bahamas, Belize, Mexico, United States, and Guyana and Honduras. Its entry into the latter two markets was via acquisition of an outsourcing firm called Emerge.

The reorganisation of itel’s books was simultaneous with its latest round of expansion in the United States.

Hewson said that since the discovery of the anomalies in the financial accounts, itel “has hired a new CFO, adjusted the process of producing financial statements to reduce manual inputs, while simultaneously working to improve the efficiency of its operations”.

Epstein said itel’s former chief financial officer Vinay Koppikar left in June and was replaced by Inga Hjartar in August.

“Along with that change we have done some more organisational changes to further enhance the efficiencies of our business,” he told the Financial Gleaner.

Portland puts the value of its investment in Outsourcing Management/itel at US$4.5 million. Speaking at the annual general meeting, Hewson said the fund was looking to realise the value of its investments through an orderly exit.

The mode of exit was not disclosed, but there have been suggestions in the past that privately held Outsourcing Management planned to go public and list on the stock market.

Portland JSX itself has traded on the Jamaica Stock Exchange since July 2016. The fund is now in its reaping phase, and has cashed out at least two investments. Its total assets are down from US$40 million at the end of its last fiscal year, February 2023, to US$26.5 million as of August.

Regarding other investments held by Portland, Hewson said in relation to telecoms Liberty Latin America, ultimate parent company for Flow, that they were eyeing the best time in 2024 to make that move when there may be more favourable share prices and general market conditions; while the US$4.5-million write-down from Merqueo may be partially reversible, as the Colombian grocery business seeks to emerge from bankruptcy proceedings.

With the 2024-2025 end of Portland Caribbean Fund II approaching, Hewson did not directly address questions regarding if or when Outsourcing Management Limited is likely to go public.

“While an IPO for OML is a possible exit, no exit strategy has been finalised, and all options remain on the table,” said Hewson. “From our perspective, we see OML as having a strong regional platform in a growing industry that is poised to influence economic development and technology advancement in the region,” he said.

Read More


  • No comments yet.
  • Add a comment