Investment firm Proven Group Limited bought out the former CEO of its subsidiary Boslil Bank — now renamed Proven Bank St Lucia — for the equivalent of US$10 million, or roughly $1.5 billion, paid for in shares as part of steps to streamline its regional banks.
The transaction moves Proven Group’s ownership of the bank from 75 per cent to 100 per cent, said Proven CEO Christopher Williams in a Financial Gleaner interview confirming resolutions passed by the board this month.
As payment for the additional stake, Proven issued 42.3 million new shares to former Boslil CEO Ryan Devaux, said Williams. It works out to about 5 to 7 per cent of the value of Proven, he added.
The shares will result in Devaux becoming the largest single shareholder in Proven Group, followed by Barita Investments with 32.5 million shares, Peter Bunting with 31.7 million, Mabet Holdings at 24.4 million, and Protek Holding at 17.7 million. The power structure, however, is such that the ownership among the founding members of Proven is collectively larger than other individual shareholders.
Proven Group Limited, which was formerly known as Proven Investments Limited up to early July of this year, has over 759.43 million shares listed on the Jamaican market and is valued at US$144.72 million based on Thursday’s trading price of 19.06 US cents per share.
The transfer of new shares to Devaux was done at 24.13 US cents per share, which Proven said was the prevailing price on July 20.
Proven intends to apply for the listing of the additional shares issued to Devaux. If approved by the Jamaica Stock Exchange, it would increase the outstanding shares to 801.73 million units, which would affect the percentage value of the stake held by existing owners.
Williams argued, however, that the transaction should not be viewed as a dilution of value to existing shareholders.
“It is not an EPS dilution, because earnings will increase,” he said. EPS, or earnings per share, is the ratio of a company’s stated profit after taxes relative to the number of shares in issue.
“We now own 100 per cent of Boslil. It isn’t a dilution, because we are picking up additional income because we own 100 per cent of Boslil profits,” Williams asserted.
Devaux, who is a chartered accountant, remains as a director of Boslil. He led the development of the bank from its early years, since 2005.
“Ryan has stepped down as CEO and we have one CEO for Proven Bank Cayman and St Lucia — Ben Freeman,” said Williams.
He added that the step-down arose from the purchase of Proven Bank Cayman.
“Essentially, the regulator required that Proven Bank Cayman [be] the owner of Proven Bank St Lucia,” Williams said.