The Bank of Nova Scotia (BNS) Jamaica is moving to redeem a block of preference shares which it issued more than four years ago.
On Friday, July 1, the Supreme Court gave the bank approval to convene a meeting of holders of the shares to consider and approve a scheme of arrangement to cancel and redeem the securities.
On May 1, 2007, BNS issued the 100 million shares at a value of $1 each to holders of the bank’s ordinary shares, at a rate of one preference share for every thirty ordinary shares.
At that time, it formed a part of the scheme of arrangement that was undertaken with the formation of Scotia Group Jamaica and the acquisition of Dehring Bunting & Golding, now Scotia Investments Jamaica.
A statement from BNS said the redemption of the preference shares will be at a price of $1.20 per share, reflecting a premium over the last trading price.
Bruce Bowen, the CEO of Scotiabank, says the preference shares did not constitute a part of the bank’s capital base and their redemption will have no effect on its operating capabilities.
However, he says the redemption will allow the Bank to eliminate various costs associated with the administration of the shares.
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