Ciboney stock rallies on AGM notice
Ciboney Group Limited’s (CBNY) stock price jumped last week by 23 per cent to $1.54, following the publication of its annual general meeting (AGM) notice which pens to potential changes for the company.
The AGM notice was published on Wednesday where shareholders will meet in an all-virtual meeting on December 6 on Iteneri. The first resolution proposes to change the name of the company to Innovative Energy Group Limited, a name similar to its new direct parent IEC Energy Company Limited. IEC Energy Company is owned by St Lucian-based Innovative Energy Company Limited, which is owned by Nigel and Jennifer Davy. Nigel Davy is the executive chairman of Ciboney with Jennifer also being a director.
Nigel and Jennifer Davy are associated with Innovative Energy Company DBA IEC SPEI Limited with Nigel serving as the managing director. This firm is involved in engineering and energy with performance contracting, factory protection plan and operations and maintenance listed as some of its services. It entered into three joint venture agreements with Wigton Windfarm Limited in April 2022 valued at more than $1.1 billion or US$7.33 million.
The second resolution is proposing to increase the company’s authorised share capital from 546 million ordinary shares to an unlimited number. The company’s current issued share capital equates to its authorised share capital. Thus, an increase in the authorised share capital limit would allow the company to potentially raise new capital via an equity raise.
The third resolution seeks to have the articles of association and memorandum of association cancelled and articles of incorporation adopted in its place. The remaining resolutions concern the approval of the audited financials, elect the directors retiring by rotation, approving, and fixing the remuneration of non-executive directors and appoint the auditors.
These resolutions give some indication as to the future of the company was enough to send the stock up from $1.16 on Wednesday to $1.54 by Friday with an intraday high of $1.57. This resulted in a market capitalisation of $840.84 million.
Ciboney’s first quarter report showed a net profit of $432,000 compared to a net loss of $346,000. However, its cash position stood at $78,000 as of August 31 following a reduction in its payables balance. This reduction was funded through a related party loan of $500,000.
Donald Patterson and Albert Gordon were appointed as directors of Ciboney on October 4 and October 9, respectively. The board also consists of Conley Salmon, Wayne Wray, Kyle Davy, and Winston Watson.
IEC Energy Company Limited launched a takeover bid for Ciboney’s ordinary shares at $0.05 on September 22 and closed on October 6. This was part of the formal process to acquire the Finsac (Financial Sector Adjustment Company) stake of 393,732,417 ordinary shares or 72.1122 per cent due to the change in control of the company. However, there has been no update communicated to the market about the success of the offer.
While Ciboney’s first quarter report shows Nigel and Jennifer Davy as connected parties to the 72 per cent stake, Jamaica Central Securities Depository (JCSD) records as of September 30 show the Finsac-related companies stakes unchanged.
Ciboney was formed on January 5, 1987, when it was involved in resort developments and had interest in several north coast hotels. However, following the 1990s financial crisis, its assets were sold over time, up to December 2017 when it sold its final fixed asset for $226.27 million. The company has been listed on the Jamaica Stock Exchange (JSE) since January 1993 and has been effectively a shell for two decades, following the takeover by Finsac.