Sagicor’s plans could open up

SAGICOR’S recently announced proposal to remove share ownership restrictions could “open Sagicor up to the world” as investors from all over could seek to grab a large stake in the “attractive” company.

This opinion has come from Christopher Callender, head securities trader at Signia Financial Group. {{more}}

Callender told BUSINESS AUTHORITY he anticipated such a scenario could increase the volume of Sagicor Financial Corporation (SFC) shares traded; however, he cautioned this could lead them to become “expensive”.

Callender was responding to a recent disclosure by outgoing SFC chairman Colin Goddard that the board would be going to shareholders to ask them to consider removing share restrictions next year.

When SFC was incorporated on December 6, 2002, it was established in the articles of incorporation that no shareholder would be allowed to “hold, be beneficially entitled to, or control, or have any other interest, directly or indirectly” in more than five per cent of the company’ shares within the first five years of incorporation and, after that, no more than 20 per cent.

The articles state this could only be exceeded if two-thirds of directors in office approved, plus there was an agreement between the company and the purchasing shareholder not to transfer the shares, and the Supervisor of Insurance was satisfied that the shareholder was “a fit and proper person.”

However, at SFC’s second annual general meeting on June 25, Goddard said the share restrictions had to be re-examined because it was the board’s view that Sagicor was well placed to support future expansion, and it needed to ensure that its capital structure was flexible enough to enable it to raise capital to facilitate that expansion.

Any attempts to purchase more than a 25 per cent stake in the company would trigger the “take over code” under Barbados’ Companies Act, prompting the buyer to issue a “take over bid” to SFC’s shareholders. (Nation News)