FosRich Establishes An American Subsidiary, Plans Rights Issue  

  • Lighting and energy company, FosRich has established an American subsidiary to explore business opportunities in the United States. FosRich USA, Inc. was registered in Delaware but will be operating out of New York.
  • FosRich intends to tap into the minority-owned business market in the USA, where the federal government has set aside US$1 trillion to purchase products and services supplied by the minority-owned business segment. The company plans to take advantage of an infrastructure buildout of bridges and roads, that will be taking place across the US. The company also plans to leverage its relationship with infrastructural giants, Siemens and Philips, to supply directly to these projects, whether they be housing projects, roads or airport expansion.
  • The company’s initial target market for its PVC pipes and fittings is the tri-state area of New York, New Jersey, and Connecticut, where these areas have a lot of Jamaicans and a lot of developers that have established strong relationships with Jamaicans. The company is also set up to take advantage of, not only opportunities in the US but also go after similar projects financed by the United Nations in developing countries. The UN procures about US$30.4 billion worth of products and services each year, including pipes like the one's FosRich produces, which provides an opportunity for the company to continue diversifying and increasing earnings.
  • With the new establishment of the subsidiary in the United States, Fosrich has access to a larger market. This could be a key driver of growth in the medium term and expectations from management is that the subsidiary could drive between 20 and 30% of the business.
  • The notice comes just days ahead of FosRich also indicating that its planned rights issue will be for those on record as owning its shares on June 2. Given that FosRich already raised $369.6 million out of the maximum $500 million allowed for companies listed on the Junior Market of the Jamaica Stock Exchange, the maximum the company can raise is $130.4 million. That said, the difference will go towards paying fees and other costs associated with raising the capital.

(Source: RJR News & Observer)