138Student Living APO closes after 2-week extension

University accommodations provider 138 Student Living’s (138SL) additional public offering (APO) of up to 513,972,784 new ordinary shares, with an option to upsize by an additional 256,986,392 shares, is now closed.

The closure, which was announced by 138SL lead broker, GK Capital Management Ltd, comes after the expiration of the latest closure date of October 23. The APO, which is seeking to raise J$3.2 billion from the equity offer of J$4.40 per share for the public and J$4.05 for the reserve pool, should have closed earlier this month but was extended by over two weeks.

This was due to the fact that potential investors with eight-digit Jamaica Central Securities Depository (JCSD) numbers have been unable to subscribe to the APO using the online subscription portal. A second addendum to the APO prospectus, which was published on September 1, adds the fillable APO application form as Appendix 6 (exhibited hereto).

This was done to allow those investors to participate in the APO. NCB Capital Markets has given the thumbs down to 138SL’s additional public offer, pointing out that the share price as at September 27 was J$4.33, lower than the APO price, with the return on equity being assessed at 7.5 per cent.

The APO is expected to broaden the shareholder base while giving existing shareholders an opportunity to further invest in the company via preferential price. The increase in the investor base is also expected to aid in price discovery and additional liquidity of the 138SL stock.

The proceeds of the APO will be used to deleverage 138SL’s balance sheet and to take advantage of investment opportunities, including the expansion of 138SL’s room capacity.

138SL currently operates 1,464 rooms at four locations on The University of the West Indies, Mona campus.

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