3 weeks ago
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Tropical Battery Company Limited expects its offer of new shares via an additional public offering will hit the market next month.
The battery distribution and solar energy company intends to utilise the full proceeds of the APO to pay down debt, but has not disclosed the amount of equity capital it intends to raise under the offer.
The energy company’s borrowings amounted to $4.7 billion as of last December, with short-term loans at $1.97 billion and long-term debt at $2.76 billion.
Chairman Marc Melville said they were awaiting final approval from the Financial Services Commission to make the offer to stock market investors, which comes less than five years after Tropical Battery first went public in 2020 and listed on the Jamaica Stock Exchange.
“It has taken longer than anticipated. The market conditions were not great,” Melville remarked at the company’s annual general meeting on Thursday. “We had to redo the prospectus. We had comments from the FSC and dealt with those comments. And we’ve gotten approval from JSE as well.”
“Before the end of April, we should open and close our APO and then use 100 per cent of that money to pay down debt,” he said.
Since Tropical Battery went public, the company has expanded into the United States and Dominican Republic through acquisitions that were partly financed with debt. CEO Alexander Melville said the company has evolved from a distributor of automotive batteries and service parts in Jamaica to a group operating out of three countries and doing business in over 30 countries.
In 2023, Tropical Battery acquired 51 per cent of Kaya Energy Group in the Dominican Republic, which specialises in solar power installations, energy management systems and project financing. That was followed by the acquisition of American company Rose Batteries, a mission-critical energy storage solutions provider in Silicon Valley, California, last year.
CEO Melville said the three companies were still learning about each other.
“Over time, we will get an exponential return on the benefit of these three businesses working together off of each other, and not just as three separate silos,” he said.
Commenting on the tariffs imposed by the Trump administration, Alexander said the company would be impacted.
“All of our customers are very exposed to tariffs. It’s in the news every day in the US, and,already with the previous administration, and the administration before that, tariffs have been passed through to customers,” he said.
Some of the components at Rose Batteries are assembled at a facility in Mexico, and others in San Jose, California, Alexander said, but he noted that they were legally considered to be inside the United States and not subject to the increased tariffs.
He said there would be a less than 10 per cent increase in the cost of Rose products attributed to labour costs.
There was no comment on the expected effect of electric vehicle maker Tesla’s troubles, nor did Tropical Battery respond to questions emailed by the Financial Gleaner.
Late last year, the company launched sales of Tesla vehicles through its subsidiary, Tropical Mobility. The company is also investing in training for automotive technicians to provide expert after-sales support.
But Tesla sales worldwide have plummeted since its CEO Elon Musk was appointed special government employee under the Trump administration, with the role of reshaping and dismantling federal agencies, which has caused blow-back on Musk and his company. Tesla vandalism and boycotts are on the rise, while the company’s stock price has plummeted.
In Jamaica, Tropical Battery operates two distribution centres in Kingston and Montego Bay and six retail stores in Ocho Rios, Mandeville, Montego Bay and Kingston. It’s adding a seventh store in Kingston, in partnership with EV bike distributor Ellesco. Tropical also services a network of approximately 1,000 resellers, including gas stations, auto parts stores and other retail outlets.
English (US) ·