Fri | Aug 14, 2020

Sagicor parent buys stake in Playa

Published:Wednesday | July 8, 2020 | 12:12 AM

Regional insurance conglomerate Sagicor Financial Company, the ultimate parent for Sagicor Group Jamaica, has acquired nearly US$5 million worth of shares in Playa Hotels & Resorts.

The Sagicor network now holds 16 per cent of Playa shares, mostly through Sagicor Group Jamaica and its managed funds.

The 1.5 million Playa shares were purchased mid-June at US$3.75 to US$4 per unit, bringing the shares held by Sagicor Financial and Sagicor Group to 21.5 million units, according to market filings to the US Securities and Exchange Commission. Playa trades on the Nasdaq exchange in New York.

Playa also disclosed that it sold 4.8 million units to Davidson Kempner Capital and its affiliates, as part of a wider debt financing deal to inject US$204 million into Playa.

The prospectus indicates that the new shareholders can sell the shares after 60 days.

The strategy behind Sagicor Financial’s acquisition of the Playa stock is unclear.

“That’s for Sagicor Financial Company to comment on, if they wish,” Sagicor Group Jamaica President and CEO Christopher Zacca said via email in response to Financial Gleaner queries.

Sagicor Group first acquired 20 million units of Playa stock in 2018, as part of hotel sale deal with the Mexican company. The share acquisition at US$10.77 per unit was done through Jamziv Mobay Jamaica Limited, which holds the shares on behalf of Sagicor Real Estate X Fund and Sagicor Group Jamaica.

The mid-June purchase was done at around a third of that price, but close to the stock’s current trading value.

Playa’s stock fell to a low of US$1.30 in March, as the market factored in the impacts of COVID on the resort company’s operations, but has since recovered some of its value and was hovering at US$3.50 on Tuesday, July 7.

In April, Playa shut down its operations due to the slowdown in the travel market. The resort company reopened the bulk of its hotels on July 1 and will reopen the rest by October 1.