Saturday 24 October, 2020

JP to sell majority of its interest in SAJE Logistics

The sale comes just a month after JP’s group chairman Charles Johnston told shareholders that the group would be restructuring its operation in response to challenges brought on the company by COVID-19.

The sale comes just a month after JP’s group chairman Charles Johnston told shareholders that the group would be restructuring its operation in response to challenges brought on the company by COVID-19.

Jamaica Producers (JP) Group Limited is offloading a portion of its shares in property ownership and management company, SAJE Logistics Infrastructure Limited.

The conglomerate, on Tuesday, disclosed that it has entered into an agreement to sell its 22.1 per cent interest in the company. The sale of a portion of its interest in the company is expected to run roughly $1.9 billion in gross consideration.

JP said it will use the proceeds of sale to continue to invest in its food, drink and logistics and infrastructure businesses.

The sale comes just a month after JP’s group chairman Charles Johnston told shareholders that the group would be restructuring its operation in response to challenges brought on the company by COVID-19.

JP’s interest in SAJE is held indirectly through a subsidiary of JP which has in turn been sold to SAJE and/or its nominees.

“We took definite steps to restructure and reduce our cost base and at the same time, develop new sales channels – particularly for those segments of our business that were most dependent on travel retail and hospitality,” Johnston said in a statement attached to the company’s results for the second quarter ended June 2020.

SAJE is engaged in property ownership and property management and the holding of investments, and prior to the sale was accounted for as an associated company of JP through various subsidiaries.

JP will retain a 9.5 percent interest in SAJE through its subsidiary, Kingston Wharves Limited.

SAJE is primarily involved in land and investment holdings in the Newport West area of Kingston and forms part of JP’s logistics and infrastructure division, which includes businesses focused on logistics, transportation, port operations and other infrastructure investments.

SAJE continued to invest in its property portfolio over the 2018-/2019 financial year through the addition of several new properties.

Over the same period, focus was placed on SAJE increasing its rental yields and property earnings whilst managing its investment portfolio of equity stocks. The company has managed to reduce some of its equity holdings to expand its property holdings and in 2020, was expected to continue to look for properties that could deliver good rental yields and present opportunities for long-term expansion and investment.

JP’s logistics and infrastructure division generated profit before finance cost and taxation of $1.3 billion up to June 2020 from revenues of $3.8 billion. Divisional profits before finance cost and taxation were down 16 per cent relative to the comparable period in 2019.

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