Wigton takeover pending
Ahead of the shareholder cap expiration in May, several investment firms and institutional investors are scouting the market for more shares in Wigton Windfarm, in hopes of gaining significant influence in the cash-rich, renewable energy business.
Following a Jamaica Observer article entitled “Wigton searches for new MD”, an investment executive reached out to confirm that there is significant interest building by both local and international investors seeking to take a sizeable stake in the publicly listed company. When Wigton’s initial public offering closed in May 2019, a five-year limitation came into force that limited any investor from owning more than 10 per cent of the company.
“There are several investors, local, regional, and international investors making calls all over trying to secure different blocks of Wigton ahead of May. It [Wigton] can easily pay a $300-million dividend and make greater use of their cash,” the executive responded while requesting that their identity not be revealed.
Wigton’s largest shareholder as of December 31 was Mayberry Jamaican Equities which owns 1.1 billion shares of the company, an amount that equates to 10 per cent. The Victoria Mutual Building Society (VMBS) is the second largest owner with 9.87 per cent of the company, with the entire top 10 controlling 43.96 per cent of the company.
However, it has since been revealed that VMBS has increased its interest in Wigton to 9.98 per cent in January. The PAM – Pooled Equity Fund also increased its stake to 2.69 per cent along with the Mayberry Investments Pension Scheme, which owns 0.93 per cent. Wigton has more than 31,000 shareholders.
The executive mentioned that the shareholder cap limited the possible upside of Wigton’s stock price which listed at $0.50. Wigton currently trades up 16.46 per cent in 2024 at $0.92 giving it a market valuation of $10.12 billion. That is the same price Wigton started at in February after a surge in volume during January.
Wigton’s third quarter saw it incurring a net loss of $13.65 million relative to the prior period’s net profit of $113.41 million. This was due to an inflationary increase in operational costs despite revenue rising six per cent to $444.30 million. For the overall nine months, Wigton’s revenue dipped 15 per cent to $1.50 billion because of an 18 per cent dip in production. However, its net profit only dipped three per cent to $490.58 million as it benefited from a tax credit from the change in its applicable tax rate.
Wigton highlighted in its report that it is now in a position to bid for the request for proposal by the Generation Procurement Entity supply of 100 megawatt (MW) in renewable energy. It also discussed how it has finalised plans to develop a 1.08-acre commercial property at Ferry Pen, St Andrew. Wigton was recently upgraded by Caricris to CariBBB+ and jmA and currently meet all their debt covenants.
Wigton is currently working on repowering Phase I of its operations as its initial independent power producer (IPP) agreement expires next month. The company has already secured an additional 20-year licence which will begin in April as it plans to install new and more efficient wind turbines. In the interim, Wigton has been continuing to explore joint venture initiatives with Innovative Energy Company DBA IEC SPEI Limited under the Wigton-IEC Joint Venture. Its latest contract is for a US$7.78-million solar installation with MBJ Airports Limited at the Sangster International Airport. This joint venture already has another US$7.33 million solar energy project with the Ministry of Agriculture and Fisheries for certain Essex Valley Agriculture Development Project locations. This is on top of its first announced project at the Norman Manley International Airport for a 2MW photovoltaic system.
Wigton’s equity as at December was $4.92 billion with $5.39 billion in total liabilities. Wigton’s cash was $3.52 billion which is mainly composed of short-term deposits and repurchase agreements. Wigton will be paying a $65-million dividend at month end to its shareholders.