Seprod shareholders approve stock split, share issuance

Seprod Limited is set to split its shares in the coming weeks, preceding a potential new equity offer to raise fresh capital to reduce its debt balances. All three resolutions at the company’s virtual extraordinary general meeting (EGM) were approved by shareholders on Monday. As a result, the company’s authorised share capital will be adjusted from one billion ordinary shares to 1.9 billion ordinary shares, effectively lifting the ceiling of how many shares can exist. Subsequently, the company’s directors will set a date for its ordinary shares to be split five-to-one. This will result in the authorised share capital rising to 9.50 billion ordinary shares while the existing share count will move from 910,945,538 ordinary shares to 4,554,727,690 ordinary shares. If an investor holds 12,500 ordinary shares of Seprod at Tuesday’s closing price of $79.82, those shares are worth $997,750. A five-to-one stock split would increase the number of shares held to 62,500 ordinary shares with each share valued at $15.96. As a result, an investor holds more shares at a lower nominal price while retaining the same value of shares. This reduced share price will benefit the company which has hinted at re-entering the markets for fresh capital. The third resolution empowered the directors to allot and issue new ordinary shares for an additional public offer (APO), rights issue or private placement at price(s) deemed fit. The resolution spoke to the net proceeds being applied as the directors see fit, including the repayment of debt by the company and its subsidiaries. Chairman Paul B Scott reiterated the debt reduction strategy at Monday’s EGM, a point which Seprod has emphasised during 2026. At the company’s July 29 annual general meeting, Scott explained that the group aims to cut its consolidated debt load from $51.21 billion to $47 billion by year end. The focus on debt reduction was recently rewarded by CARICRIS (Caribbean Information & Credit Rating Services Limited) which revised its outlook on the manufacturing and distribution conglomerate from negative to stable. The ratings agency reported a negative outlook in October 2025 based on the group’s financial flexibility being constrained due to the growing debt levels to fuel the acquisition-led growth. At the time, CARICRIS expected Seprod's debt service coverage ratio (DSCR) to remain challenged over the next 12 to 15 months. “The stable outlook is premised on the high likelihood that Seprod’s financial flexibility will continue to improve over the next 12-15 months. This is underpinned by the refinancing of short-term debt into a longer-tenor bond, stronger cash balances, improved capitalisation and an increased focus on deleveraging,” CARICRIS noted as it expects the group’s effective DSCR to remain above 1.0 times. Seprod’s standalone debt has moved from $13.92 billion in 2022 to $15.88 billion in 2025, with $8.45 billion of this debt in the form of bonds maturing between December 2027 to July 2031. Seprod’s core Jamaican operations and subsidiaries have seen their aggregate debt balances move from $17.13 billion to $19.46 billion. Meanwhile, subsidiary Musson International Dairies Limited refinanced an $854.35 million bond in December 2025 through the issuance of a new $3 billion bond in November 2025. This included a $1.53 billion tranche with a 9.75 per cent interest rate and a $1.47 billion tranche with a 10.25 per cent interest rate. However, Seprod’s consolidated debt balance has moved from $33.01 billion in 2022 to $51.21 billion in 2025. The higher debt load is due to its subsidiary A S Bryden & Sons Holdings Limited (ASBH) which has been the vehicle used to expand Seprod’s presence across the English-speaking Caribbean over the last four years. Aside from ASBH taking on US$60.72 million debt facility for the amalgamation process in June 2022, it has also consolidated the debt load of the various subsidiaries it has acquired over the years. As a result, ASBH’s consolidated debt has risen from $15.88 billion in 2022 to $26.24 billion at the end of 2025. Despite the relatively large, consolidated debt load, Seprod’s financial risk profile continues to be recognised as good by the ratings agency based on operating revenue growth, improved capitalisation and adequate liquidity. Management also intends to avoid new debt for the remainder of 2026 as it cuts the debt on its balance sheet. The report noted that Seprod is expected to repay $8 billion in maturing debt from internal cash flows over the next year. “Notably, Seprod has consistently met its debt obligations in full and on time. Moreover, should the need arise, the Group can comfortably utilise its portfolio of liquid assets which includes short-term marketable securities of circa J $4.9 billion as at December 2025,” the CARICRIS report noted. Seprod sold its stake in subsidiary International Biscuits Limited (IBL) in February 2026, with an inflow of $1.71 billion from the sale. That sale formed part of its portfolio optimisation strategy as it retained distribution rights for IBL products up to February 2031, with the option to renew. According to documents from the Companies Office of Jamaica, Kevin Donaldson, Wade Mars and Ravi Rochlani were appointed directors of IBL on February 28. “So, we didn't consider it sensible over the long term to be in a market that we are competing with our customers. So, strategically we felt divesting it would be a good choice,” Scott explained at Seprod’s July 2026 AGM. Seprod is now moving to integrate its latest Barbadian acquisitions while leveraging its larger distribution platform across the region to improve product penetration and cross-selling opportunities. The company has implemented artificial intelligence (AI) driven analytics to enhance real time monitoring of the business while ASBH moves towards warehouse consolidation in Trinidad & Tobago. It is also set to benefit from the efficiencies from the recent introduction of its new Benhill machine for its dairy business. With Seprod receiving shareholder approval at Monday’s EGM, the board is also empowered to issue new Seprod shares as consideration for acquisitions in the future. Seprod previously received permission from shareholders to issue new shares as the directors saw fit at its September 2023 AGM. Seprod increased its stake in ASBH from 50 to 80 per cent in July 2026 by issuing new Seprod ordinary shares in exchange for the ASBH shares tendered by investors. This move resulted in Seprod director Anthony Mark Hart becoming the 10th largest shareholder in Seprod. Hart was previously issued ASBH shares in December 2024 as consideration for his shares in Caribbean Producers (Jamaica) Limited (CPJ). “CariCRIS expects continued good performance from Seprod over the next 12 to 15 months supported by continued revenue growth from recent acquisitions, planned new product launches, expected benefits from its operational modernization initiatives and broadly stable macroeconomic conditions across its key markets,” the ratings agency noted. Seprod’s stock price remains down five per cent in 2026 as of Tuesday, resulting in a market capitalisation of $72.71 billion. It has paid $1.21 in dividends totalling $1.10 billion during 2026.