Mayberry Invest-ments Limited, MIL, a boutique investment bank with a net worth of $26 billion, is rearranging its corporate structure to distinguish its regulated operations.
The non-regulated operations will be shifted to a new holding company to be called Mayberry Group Limited, which MIL says will provide a clearer financial picture, unburdened by the consolidation of results with unregulated entities.
The reorganisation will not affect shareholders or creditors. But Mayberry needs shareholder approval to proceed with the adjustments. The vote is set for July 26.
“A major advantage of this initiative is that MIL will no longer have to report, in its regulatory returns, the results of un-regulated entities which are outside the regulatory net,” the brokerage said in the booklet laying out the new scheme of arrangement.
“The second reason is that it puts the Mayberry group of companies in a better position to take advantage of value-creation opportunities in any direction – whether in the regulated space or unregulated space without materially affecting MIL. In its current structure, all acquisitions or expansion would have gone through, and been effected under MIL, the regulated entity, and that is a natural inhibiting factor, by reason of regulatory notice and in some instances regulator’s consents,” it said.
Under the current group structure, MIL operates as the parent with two subsidiaries, Widebase and Mayberry Jamaica Equities Limited, MJE, both of which are incorporated in St Lucia. MIL currently holds a 50.42 per cent stake in MJE and 100 per cent of Widebase.
Mayberry Group Limited will become the parent operation with three direct subsidiaries – MJE, Widebase, and Mayberry Holdings Limited. The latter will become the holding company for MIL.
After the restructuring, Mayberry Investments Limited will become a subsidiary of Jamaica-registered Mayberry Holdings Limited, while the latter company will be held directly by Mayberry Group Limited.
The adjustment will remove MJE from MIL’s direct ownership. Both entities are listed on the Jamaica Stock Exchange.
Mayberry Investments will also be taken private, but shareholders will swap MIL shares for Mayberry Group on a one-for-one basis.
“Shares in MIL held by MIL stockholders will be cancelled and the same number of shares will be issued by MIL to Mayberry Holdings,” the company said.
Mayberry Group intends to list simultaneously on the JSE by October 10.
Mayberry Investments, which is headed by Christopher Berry as executive chairman and Gary Peart as CEO, declined to comment on the scheme ahead of the vote later this month. The results will be reported to the Supreme Court, which will hold a final hearing on the reorganisation on September 28.
Mayberry’s directors, who together hold 85 per cent of MIL shares, have already indicated their intention to approve the resolution, well above the 75 per cent assent needed to advance the reorganisation plan.
However, the court has ruled that minority shareholders must be given the opportunity to vote on the scheme, to ensure fairness.
Mayberry says the restructuring will provide the group with a more flexible corporate structure, facilitating both organic and inorganic expansion in regulated and unregulated industries.
Mayberry Holdings can integrate future regulated financial businesses without impacting MIL, while unregulated businesses can be acquired or developed under the auspices of the ultimate parent company, Mayberry Group Limited, the company said.
“MGL would have the agility to respond to opportunities in the market without the tighter regulatory control which currently prevails over MIL,” it added.
Additionally, by excluding the results of unregulated entities from its regulatory returns, MIL can streamline its reporting obligations. Mayberry, which also operates in the foreign exchange market as the owner of a cambio, is answerable to three regulators – Bank of Jamaica, Financial Services Commission and the Jamaica Stock Exchange.
