NCB Fi­nan­cial Group, the Ja­maican fi­nan­cial con­glom­er­ate chaired by Michael Lee-Chin, yes­ter­day an­nounced it agreed to sell a 30.2 per cent stake in Bermu­da’s Clar­ien Group, to Cor­ner­stone Fi­nan­cial Hold­ings Ltd, the com­pa­ny found­ed by Ja­maica’s Paul Simp­son.

The con­sid­er­a­tion for the NCBFG share sale was not dis­closed yes­ter­day, but sources fa­mil­iar with the deal said the sale of shares by oth­er Clar­ien Group share­hold­ers would re­sult in Cor­ner­stone ac­quir­ing a ma­jor­i­ty stake in the Bermu­da com­pa­ny.

In its news re­lease yes­ter­day, NCBFG said it would main­tain a 19.9 per cent in­ter­est in the Clar­ien Group and will pro­vide tran­si­tion sup­port to Cor­ner­stone, through its sub­sidiaries.

NCBFG said its re­duced share­hold­ing in the Clar­ien Group, whose pri­ma­ry sub­sidiary is Clar­ien Bank “will not have a ma­te­r­i­al im­pact on the fu­ture earn­ings or the as­set base of NCBFG af­ter the com­ple­tion of the sale.”

Ja­maica’s largest fi­nan­cial ser­vices com­pa­ny said the trans­ac­tion, which is sub­ject to reg­u­la­to­ry ap­proval in Bermu­da and Ja­maica, is in keep­ing with its on­go­ing strat­e­gy to re­al­lo­cate cap­i­tal.

Last Fri­day, NCBFG an­nounced that its much-her­ald­ed Ad­di­tion­al Pub­lic Of­fer­ing (APO) of shares raised J$2.5 bil­lion (US$16 mil­lion), about 50 per cent of the J$5 bil­lion (US$32 mil­lion) the com­pa­ny was hop­ing to gen­er­ate.

“The APO pro­ceeds are in­tend­ed to re­duce debt and strength­en cap­i­tal flex­i­bil­i­ty at the fi­nan­cial hold­ing com­pa­ny...At cur­rent run rates, the short­fall in the raise should be gen­er­at­ed from earn­ings over four to six months and is not ex­pect­ed to sig­nif­i­cant­ly im­pact our plans for the com­ing year.”

Yes­ter­day, in a state­ment on its web­site, Clar­ien Group said Cor­ner­stone Fi­nan­cial Hold­ings “will ac­quire a con­trol­ling in­ter­est in Clar­ien Group ... (and) ex­ist­ing Clar­ien share­hold­ers, NCB Fi­nan­cial Group (NCBFG) and Ed­mund Gib­bons Ltd (EGL), will re­main share­hold­ers along­side Cor­ner­stone to take the busi­ness for­ward...” A con­trol­ling in­ter­est in a com­pa­ny is gen­er­al­ly de­fined as more than 50 per cent, but Cor­ner­stone’s stake in the com­pa­ny could end up be­ing as much as 70 per cent.

For Cor­ner­stone to ac­quire a con­trol­ling in­ter­est in Clar­ien, the Ja­maican fi­nan­cial hold­ing com­pa­ny would have to pur­chase more than 20 per cent of the Bermu­da com­pa­ny from its non-NCBFG share­hold­ers.

When NCBFG fi­nalised its ac­qui­si­tion of 50.1 per cent of Clar­ien in De­cem­ber 2017, “funds man­aged by Port­land Pri­vate Eq­ui­ty” held 17.92 per cent and Ed­mund Gib­bons Ltd (EGL) re­tained a 31.98 per cent share­hold­ing.” It was not clear last night whether Port­land Pri­vate Eq­ui­ty still owns shares in Clar­ien.

Both NCBFG and Port­land Pri­vate Eq­ui­ty are part of Port­land Hold­ings, which was found­ed and is chaired by Lee-Chin, who is the hold­ing com­pa­ny’s ma­jor­i­ty share­hold­er. Lee-Chin is al­so the con­trol­ling share­hold­er of NCB Glob­al Hold­ings, which owns about 60 per cent of T&T’s Guardian Hold­ings Ltd.

Clar­ien Bank CEO, Ian Tru­ran said in the com­pa­ny’s news re­lease, Cor­ner­stone’s in­vest­ment is a tes­ta­ment to the shared val­ues of both or­gan­i­sa­tions.

“The cul­ture of Cor­ner­stone aligns per­fect­ly with Clar­ien. This pro­posed trans­ac­tion pro­vides an op­por­tu­ni­ty for us to con­tin­ue to de­liv­er ex­cep­tion­al val­ue to clients and stake­hold­ers by of­fer­ing the high­est lev­els of ser­vice, en­hanced prod­ucts, and in­no­v­a­tive so­lu­tions,” said Tru­ran.

Sources close to the trans­ac­tion said the ac­qui­si­tion of a con­trol­ling in­ter­est in Clar­ien by Cor­ner­stone will dou­ble its size, when fi­nal ap­proval is grant­ed, and would be ac­cre­tive to Cor­ner­stone’s bot­tom line.

Ma­jor­i­ty state-owned First Cit­i­zens is the sec­ond largest share­hold­er of Bari­ta In­vest­ments Ltd, which is pub­licly list­ed on the Ja­maica Stock Ex­change and is Cor­ner­stone’s main sub­sidiary. First Cit­i­zens is al­so a lender to Cor­ner­stone.