Dolla Financial IPO oversubscribed by a massive J$4.5 billion

Dolla Financial IPO oversubscribed by a massive J$4.5 billion

Seeking to raise J$500 million through its initial public offer (IPO), Dolla Financial Services’ equity raise was oversubscribed by more than J$4 billion on its first day today (May 27), signaling significant faith in the microfinance company headed by CEO Kadeen Mairs.

With more than $5 billion in applications, Dolla Financial now boasts one of, if not the, largest listings in the history of the Junior Market of the Jamaica Stock Exchange (JSE).

In a statement this afternoon, Dolla Financial said: “On behalf of the Board of Dolla Financial Services, we are humbled by the overwhelming support and the strong show of confidence from the market.

“First Rock Private Equity and Dequity Capital Management welcomes our new shareholders as we embark on creating increased value for us all.

“We would also like to thank our other stakeholders, Patterson Mair Hamilton (Attorneys), VM Wealth (Lead Broker and Arranger), Barita Investments, Mayberry Investments and JMMB (our Selling Agents) as well as our management team and employees.”

The J$500 million being sought is the maximum equity raise allowed for new listings for junior market companies.

Ahead of today, the IPO had been priced at $1 per share with the proceeds being used to fund acquisitions and other expansion of the business, particularly in Guyana, where it opened an office last year and plans for establishing a presence in two other Caribbean territories.

Use of proceeds from IPO

In addition, the proceeds will be used to settle debt owed to the selling shareholders, First Rock Private Equity and DeQuity Capital Management as well as expanding Dolla’s loan portfolio regionally through acquisitions. A portion of the proceeds will be used for organic growth while strengthening the micro financer’s capital base.

Dolla Financial Chairman Ryan Reid is one of the principal shareholders in First Rock Private Equity and Mairs is the principal behind DeQuity. With the success of the IPO, First Rock’s equity holding in Dolla Financial will be diluted to 60 percent, while DeQuity’s stake will fall to 20 percent.

Dolla Financial currently operates in Jamaica and Guyana. The company has eight branches, one of which is in Guyana. As part of the expansion process, Dolla Financial is now in the process of applying for money lending licences in two countries, one of which is The Bahamas.

Dolla Financial’s listing on the stock market has been a goal since 2017 but now after two rounds of debt financing and restructuring, the company had said it was ready to make its sojourn on the junior market of the JSE.

Ryan Reid, chairman of Dolla Financial.

Dolla Financial began operations in 2014, first with remittance, bill payments, and cambio divisions before departing those operations and redeploying capital into microcredit services as its new core business.

Some 48 percent of its revenue comes from the loan product, Dolla Elite, which is targeted at entrepreneurs and high net worth clients.

For the first quarter ending March 2022, Dolla Financial made a profit of J$66 million on revenue of J$141 million.

Assets have grown to almost J$1 billion, including a loan portfolio of J$870 million, net of provisions for bad loans.

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