PBS Completes $126 Million Syndicated Credit Facility and Xerox Acquisition

PRODUCTIVE Business Solutions Limited (PBS) has successfully completed the acquisition of Xerox del Peru, SA and Xerox del Ecuador, SA, and at the same time entered into a US$126 million (US$19.55 billion) syndicated credit facility through Citibank NA

PBS announced in early April that it intended to acquire Xerox’s Peruvian and Ecuadorian operations, subject to additional approvals. PBS received those approvals, allowing it to complete the acquisition of both businesses by the end of the second quarter on June 30. The acquisition is expected to add more than $400 million to the group’s consolidated revenue over the next 12 months. PBS reported $333.33 million ($51.19 billion) in revenue for 2023 in its unaudited fourth-quarter report.

“We welcome our colleagues from Peru and Ecuador to PBS. They join a team of more than 3,000 technology professionals at PBS who work to connect the world’s leading technology companies with governments and leading companies in the Caribbean, Central America and South America,” said PBS CEO Pedro Paris Coranado.

Xerox Holdings Corporation will continue to work with PBS on a partner-led solution as Xerox continues to evolve its business model. PBS is now the largest Xerox distributor in the Western Hemisphere.

The acquisition represents PBS’s second major acquisition in a year, following its June 2023 acquisition of Curacao-based Infotrans Group Holding BV. The purchase price has not yet been disclosed because PBS’s audited financial statements have yet to be released — more than three months after the Jamaica Stock Exchange’s (JSE) deadlines. This resulted in the suspension of trading in all classes of PBS shares on July 2 until the audited financial statements are released. The company is expected to release its audited financial statements by the end of this month, at the same time that Xerox releases its second-quarter report, which will include details of its sales to PBS. The company has collected $480,000 in accumulated penalties for the 96-day delay in financial statements.

“PBS is the leading corporate technology platform in the Caribbean and Central America. We are at the forefront of digital transformation and technology investment in our markets. As a result, we are fortunate to have a strong pipeline of opportunities to leverage the additional capital we have received. PBS is privileged to have the support of leading banking partners in our region and beyond, many of whom are also our customers,” PBS Chairman Paul B Scott said in a statement.

PBS’s consolidated debt balance at the end of December 2023, as reported in the fourth quarter, was $144.24 million, with $47.56 million listed as current or payable within the next 12 months. This balance also included $2.58 billion ($16.65 million) related to listed cumulative redeemable preferred shares set to expire on July 31 at $100.

The syndicated loan was made through Citibank, the fourth-largest bank in the United States of America, and included a group of banks from Central and South America, as well as Trinidad and Tobago, on June 26. The loan proceeds were to be used to fund existing debt, extend debt maturities — such as those in 2025 and 2026 — and improve its liquidity profile to continue investing in organic growth opportunities. The move further aligns the funding base of PBS’s various subsidiaries, which operate in 22 markets across the region. PBS also initiated the redemption process of its Jamaican dollar (JMD) preferred shares effective June 28.

PBS noted in its release: “The transaction is an example of the confidence that major global banks have in PBS. It is also an example of PBS’s international profile and its ability to raise capital internationally at a time of illiquidity in Jamaican markets.”

While the Jamaica Financial Services Commission (FSC) has not released regulatory data on the securities industry in over a year, 2024 saw a noticeable shift in capital market refinancing and the management of upcoming debt maturities. JMMB Group Limited (JMMBGL) was able to extend two maturities of $8.41 billion of its preferred shares from January 2024 to January 2030 by agreeing new terms with preferred shareholders at a general meeting. JMMBGL also has $10.36 billion spread across four preferred shares maturing in March 2025.

Mayberry Jamaican Equities Limited recently raised $3.38 billion in a public fundraising on the JSE bond market, of which $2.2 billion was used to partially repay a margin loan to Mayberry Investments Limited (MIL). Mayberry Investments is due to repay $1.374 billion to Tranche II bondholders on July 19 and has $2.282 billion to repay Tranche III bondholders in January 2025.

NCB Financial Group Limited (NCBFG), a standalone holding company, has $36.84 billion in current debt maturing between October 2023 and September 2024. The company has refinanced part of its debt through new bond issues but failed to meet its last additional public offering (APO) in which it raised $2.50 billion of its initial target of $5.097 billion. NCBFG is now poised to sell NCB (Cayman) Limited and 30.20% of its shares in Bermuda-based Clarien Group Limited.

Tropical Battery Company Limited intends to turn to the capital markets in a secondary action to reduce its current debt of $1.72 billion from its recent acquisition of Rose Electronics Distributing Company LLC (Rose Batteries). Other notable publicly known debt maturities include First Rock Real Estate Investments Limited’s $13.54 million debt due 2024; Fund Bay Equity Holdings Limited’s 8.50% bonds due this year; and Portland (Barbados) Limited’s multi-million dollar debt due August 2024.