Innovative Energy will issue new shares for purchase

Innovative Energy Group Limited (IEGL) will ask its shareholders in January 2025 for permission to issue new ordinary shares to acquire Innovative Energy Company DBA IEC SPEI Limited.

According to its annual report, which was published on the Jamaica Stock Exchange (JSE) yesterday, Innovative Energy Group (formerly Ciboney Group Limited) will seek to issue 850 million ordinary shares to acquire IEC SPEI Limited. The resolution also asks for shareholder consent to list the new ordinary shares on the JSE and for the board to be authorized to take all necessary steps to carry out this process. The annual general meeting (AGM) to consider this resolution will be held on January 9.

In its 2024 financial audits published on August 28, Innovative Energy Group revealed that it had entered into an agreement with the owners of IEC SPEI to purchase 100 percent. shares for $17.75 million ($2.8 billion). The disclosure indicated that Innovative Energy Group will now become a holding company with annual revenues of more than $1.4 billion. According to the annual report, the transaction is expected to be finalized in the current quarter (October to December). IEC SPEI Limited was incorporated on November 12, 2014.

At Innovative Energy Group’s virtual General Meeting in December 2023, the company noted that it intends to raise capital through an additional public offering (APO), the green bond market, and commercial and development banks to quickly launch some of the renewable energy opportunities it wants to explore . This was done with the understanding that the company was primarily focused on sustainable energy, engineering, construction and real estate development.

According to the 2023 annual accounts of IEC SPEI Limited, Nigel Davy holds 100 shares, Jennifer Davy holds 50 shares and Innovative Energy Company Limited, an international business company (IBC) from St. Lucian, owns nine shares. Nigel Davy is the CEO of Innovative Energy Group, a listed company. Nigel, Jennifer and Kyle Davy are the beneficial owners of IEC Energy Company Limited, which owns 69.91% of Innovative Energy Group, a listed entity. Innovative Energy Company Limited is the owner of IEC Energy Company Limited.

The Davy already owns 69.91 percent of the shares, making it unclear whether the company will issue all new shares to the market through a rights issue or APO. This is because under JSE rules there is effectively an 80 per cent limit on how much of a company a single beneficial shareholder can own.

It is not yet known whether Innovative Energy Group will issue new shares to the public or other investors in a public share offering due to a restriction under JSE regulations that would limit the Davy family to owning more than 80% of the company. Innovative Energy Group may complete the acquisition and settle the transaction using debt and equity at a later stage. These considerations are important because Innovative Energy Group is a company emerging from a multi-year stagnation and was dependent on affiliate financing from IEC SPEI Limited to get its operations off the ground quickly.

IEC SPEI Limited is an engineering and energy company with contracting, factory protection plan and operations and maintenance listed as some of its services. In April 2022, it entered into three joint venture agreements with Wigton Windfarm Limited worth over $1.1 billion, or $7.33 million.

“IEG will be the distributor/trader of renewable energy products in Jamaica and the Caribbean, while IECL will continue its activities in renewable energy development, engineering, procurement, construction (EPC) and project management,” the annual report stated.

IEC SPEI Limited has not considered the latest request for proposals for the supply of renewable energy with a capacity of up to 100 MW to the grid. The company has proposed one 10.20MW solar project in Mango Valley, St Mary and another 12MW solar project in Spring Village, St Catherine. Wigton Windfarm Limited and SunTerra Energy Jamaica Limited have successfully progressed to the pre-selection tender stage.

However, IEC SPEI Limited will have another opportunity to bid to supply renewable energy to Jamaica’s grid when the Government of Jamaica (GOJ) is ready to invite bids for its next 168 MW bid in fiscal year 2024/2025 (from April 2024 . until March 2025). . This was announced by Governor-General Sir Patrick Allen in his Speech from the Throne on February 15. These RFPs are managed by the Manufacturing Procurement Unit (GPE).