(Trinidad Express) Massy Holdings Ltd yesterday announced that it has agreed to pay US$140.3 million ($954 million) for 100 per cent of IGL Ltd, a company in Jamaica that imports and distributes cooking gas and manufactures industrial gases.
In a notice on the website of the Trinidad and Tobago Stock Exchange, Massy said that on December 19, 2022, its board approved the acquisition of IGL (St Lucia) IBC Ltd by Massy Gas Products Holdings Ltd, a wholly owned subsidiary of the Massy group.
The Massy notice indicated that it entered into a share purchase agreement with a company called Caribbean Petroleum Marketing Ltd to purchase 100 per cent of the share capital of IGL (St Lucia) IBC Limited, for US$ 140.3 Million.
IGL (St Lucia) IBC Ltd owns 100 per cent of the share capital of IGL Ltd, a company that has operated in Jamaica for six decades and whose primary business functions are the distribution of LPG (cooking gas), manufacturing and distribution of industrial medical gases and the provision of a range of related services in both segments, according to the Massy notice.
The websites caribbeanjobs.com and fiwibusiness both say that 100 per cent of IGL Ltd is owned by the Rahamut Group of companies.
Imtiaz Rahaman, who is the deputy chairman of the Rahamut Group, is listed as being an executive director of IGL Ltd. Apart from Imtiaz Rahaman, two other members of the Rahaman family sit on the IGL board: Razai Azard Rahaman and Raffia Rahaman.
The Express made several attempts yesterday to contact Imtiaz Rahaman by telephone, text message and through a third party seeking a comment from him on the reports that IGL Ltd is 100 per cent owned by the Rahamut Group.
At Massy’s annual meeting yesterday, a shareholder asked the group’s president and CEO, Gervase Warner, whether Massy intended to pay the shareholders of IGL Ltd in US dollars, but collect Jamaican dollars from the customers of the company, which would make Massy susceptible to the changes in the value of the Jamaican dollar.
Warner responded: “Yes…we are paying in US dollars and it does make us susceptible to the changes in the Jamaican exchange rate.
“Now, I would like to remind you that we have operated in Jamaica for many years. We also bought the LPG business that we have in Jamaica for US dollars.
“LPG is a commodity that is US dollar-indexed. So when the exchange rate changes, the price of LPG changes and we are able to reflect that in the prices of the product to consumers.
“Why we are comfortable with doing that is that we have over 15 years of experience in Jamaica running an LPG business very profitably. Being able to service the loans we have taken out for those acquisitions and being able to continue to grow the business.
“You are right, it does have that exchange rate risk component to it, but we think that is sufficiently mitigated by the nature of the business and our experience in operating exactly the same business, in exactly the same market.”
At yesterday’s annual meeting, Warner said the Massy acquisition of IGL Ltd is subject to the regulatory approval of Jamaica’s Fair Trading Commission. That message also formed part of the notice that Massy issued yesterday.
Massy Gas Products and IGL Ltd are the two largest distributors and suppliers of LPG to the Jamaican market.
Questioned whether IGL is the top distributor of LPG in Jamaica with Massy Gas Products second, Warner asked Massy’s new executive director, Vaughan Martin, to answer the question.
“We are neck and neck overall. Massy leads on the bulk side, so in volumes we are number one and IGL is number 2. But IGL leads in cylinders, so they are number one and we are number 2. It’s close,” Martin said, adding that he wanted to make the point that IGL controls 99 per cent of the industrial gases market in Jamaica
“We also have the industrial gases business in Trinidad and Guyana. That consolidation of us being the leader in industrial gases in the region is also a very strong position for us.”
In the notice, Massy said the acquisition of IGL (St Lucia) IBC Ltd from Caribbean Petroleum Marketing Limited, is part of the gas products portfolio’s growth strategy for its LPG and industrial gases business operations in Jamaica
Massy said the acquisition will represent a 7.3 per cent increase in the Massy Group’s assets and will contribute to an increase in the Group’s profit of approximately 7.1 per cent.
The acquisition of IGL Ltd is Massy’s third announced purchase in December. The investment holding company acquired a supermarket chain in Jacksonville, Florida and the Trinidad assets of Air Liquide.
The total estimated expenditure of the three transaction is US$244 million.