Pulse Investments Limited (PULS) held their Annual General Meeting (AGM) of the Company on Tuesday, February 18, 2020.
The shareholders approved for the increase of the companies Share Capital from 1.95 Billion shares of no par value to 7.5 Billion shares of no par value. An additional 5.55 Billion additional shares.
Ultimately the company acknowledges the desire for a 3:1 stock split but has not acknowledged the targeted amount to be raised.
“THAT THE SHARES IN PULS BE SPLIT, ON THE BASIS THAT 3 (THREE) ADDITIONAL SHARES BE ISSUED TO SHAREHOLDERS FOR EVERY SHARE CURRENTLY HELD BY THEM IN THE COMPANY.”
The board has the option to use these shares as a way of raising new equity through a renounceable rights issue, conduct a stock split, or do a combination of both.
Thought it reassures via a blog post that ” The split by itself is not a fundraising measure – it’s usually a tool to make the stock more attractive for trading – but the rights issue is. “
The Company will use this additional capital to “acquire new companies and buy out leased property”.
“ONE OF THE THINGS THAT WE ARE CONSIDERING, AND THIS IS BY NO MEANS FINAL, WE HAVE HAD OVER THE YEARS OPINIONS FROM SHAREHOLDERS AND OTHERS THAT PULSE WOULD BE BETTER SERVED IF IT OWNED THE PROPERTY IT NOW LEASES,” SAID PULSE CHAIRMAN AND MAJORITY OWNER KINGSLEY COOPER.
Capital Use?
One such property is Villa Ronai, a property which spans nine-acres in Stony Hill, St Andrew. The property is currently owned by Mr Cooper with Pulse holding a 50-year lease. The property offers accommodations for guests and is slated for the addition of 68 suites as well as the construction of residential units in a new development called Pulse Homes.
“We are thinking of Villa Ronai at this time because of the current investment that is being made and also the plans for future investment in terms of Pulse Homes, and so on,” Cooper said.
The Company issued a global note worth over $250 million earlier in January with $65 million of that amount being dedicated to settling bank debts held by pulse. The remaining $185 million will be split between the Villa Ronai property and Pulse Homes project with the first phase of the Villa Ronai development slated for summer 2020.
Pulse also eyes expansion of its creative business segment through acquisitions, with an eye on a cosmetics company, and radio station IrieJam which broadcasts from New York and primarily targets Caribbean nationals in the United States.
“The stock split is proposed because once the stock price gets to a certain level, we find that there seems to be a barrier to subsequent trades or further growth in the value of the stock. So splitting the stock has proven beneficial in the past. It increases liquidity and it makes it easier for investors to come into the company,” Cooper said.
At year ending June 2019, Pulse scored a net profit of $653 million from $1.06 billion of combined revenue and other income. At half-year ending December, the company made $473 billion in profit from combined revenue and income of $603 million.
The Pulse stock, meanwhile, is up 72 per cent year to date. It closed Tuesday at $10.32 per share, valuing the company’s 1.63 billion of issued shares at $16.8 billion.
The purpose of these shares will be determined during a PULS board meeting scheduled for February 26, 2020.
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