A senior executive at Portland Private Equity (PPE) says that junior market prospect, Tropical Battery has significant runway ahead of it with the transitions taking place in the automotive and renewable energy spaces.
Vice-president of Investments at Portland Private Equity, Ricardo Hutchinson has identified future opportunities in the electric car market for Tropical Battery.
“The COVID pandemic has served to highlight the key role that Tropical Battery plays as a market leader in the automotive battery space, which we believe may create opportunities for an increase in market share. The company is also in a strong position to take advantage of the transition of the economy to more efficient power storage in both the automotive and electric energy space,” Hutchinson told Loop News.
He said, “Tropical Battery's experience in battery technology puts it in prime position to take advantage of the transition to electric cars which are 90 per cent batteries and 10 per cent cars compared to the current models which are 90 per cent cars and 10 per cent batteries.”
Moreover, as climate change forces adaptation to cleaner energy, Tropical Battery is well placed to expand its leadership position to this sector which is very reliant on battery technology, the investment manager said.
Tropical Battery last week issued the prospectus for an offer of up to 325 million ordinary shares in the company. Priced at one dollar per share, the offer will open on September 22, 2020, and close on September 30, 2020.
If all shares are subscribed, the company aims to raise $325 million, some of which will go to selling shareholders and the remainder to funding company expansion.
“In addition to the growth opportunities mentioned in the prospectus, we remain bullish on the company and believe that there is room for growth of the short, medium and long term,” Hutchinson said.
Portland Equity’s connection with Tropical Battery began in 2017, when the latter’s holding company Diverze, received US$8 million in a deal structured to allow PPE to make additional investments in the company.
The deal was transacted through Portland Caribbean Fund II (two), to finance expansion plans both for Tropical Battery and Chukka Caribbean Adventures, companies owned by the Melville family.
“We aren’t selling any of our position,” said Hutchinson. “We don’t directly own any of the Tropical Battery shares. “The Selling shareholder mentioned “Dai Diverze (Jamaica) Limited” is a subsidiary of the company we invested in Dai Assets Inc.”
Hutchinson stated, “We are currently not contemplating an exit as we believe that Tropical Battery has significant runway ahead of it with the transitions taking place in both the automotive and renewable energy spaces.”
All of the issued shares in Tropical Battery Company Limited are held by Dai Diverze, a company incorporated under the laws of Jamaica.
Meanwhile, all of the issued shares in Dai Diverze (Jamaica) Limited are held by Diverze Assets Inc., a company incorporated under the laws of St. Lucia).
The shareholders of Diverze Assets Inc. are Portland Private Equity (holding 40 per cent of the issued capital of Diverze Assets Inc.) and Mark Melville, Alexander Melville and Daniel Melville (collectively holding 60 per cent of the issued capital of Diverze Assets Inc.).
Source: Loop Jamaica