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Wigton Windfarm Limited will remove its 10 per cent cap on individual ownership in two months, but already, investors are repositioning with heavy share transactions, the most robust of which occurred on Thursday with trades worth over $500 million.
“Removing the cap sets the stage for someone or group of bodies to try take control of the company. The belief is that in that environment, it will probably lead to an increase in the stock price,” said Mayberry Group CEO Gary Peart during an investor briefing last week.
Wigton is a renewable-energy producer that was formerly owned by the Jamaican Government but was divested via the stock market in 2019. Partly to entice subscription by a wide base of the public, the 11 billion share units were priced at an accessible 50 cents per unit during the IPO. Individual ownership in the stock was also capped at 10 per cent in a market that allows for such holdings of up to 80 per cent.
“Companies that do well are companies that are focused, and so the control issue is not important,” Peart asserted. The Wigton IPO was brokered by Mayberry Investments Limited, and one of its sister companies currently holds a stake in the wind farm.
The market activity last week knocked the stock off its perch to around 96 cents per share.
On Thursday, investors traded over 561 million units of WIG shares, the most activity the stock has seen in at least two years, according to Jamaica Stock Exchange data. The stock price fell 15 per cent on that day to close at 96 cents per share, but it was then still up 20 per cent year on year.
However, the rout was not sustained. By Friday, the stock had climbed back to $1.07 per share. It still closed 3.6 per cent lower for the week but was up 35 per cent year to date.
The WIG stock trades at around 38 times what it earned in the last financial year. This within the context of an overall market trading at a multiple of nine times.
The company is in the process of finalising an upgrade programme for some of its turbines that were installed two decades ago and are at the end of their useful life. Wigton has been cagey about disclosing the level of investment required but says it is in the process of seeking financing. Jamaica’s utility regulator is also yet to approve the upgrade programme laid out by the wind farm operator.
Wigton’s articles of incorporation in relation to the shareholding limitation will cease to have effect after May 2024, according to information on renewable energy producer’s website.
The largest shareholders in Wigton, based on market disclosures to December 2023, are Mayberry Jamaica Equities, a fund with 10 per cent interest; VM Building Society 9.87 per cent, National Insurance Fund 6.4 per cent, ATL Group Pension Fund 5.4 per cent, and Sagicor Investments with 4.4 per cent.
Wigton Windfarm is currently valued at $11.77 billion on the market.
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