(Kingston, Jamaica) Blue Equity LLC is now focused on integrating new asset Shell gas operator Cool Petroleum Holdings into the group, and says it will be expanding the network of gas stations nationwide. The private equity firm also hinted at another acquisition later this year, saying it remains optimistic about Jamaica’s prospects as an investment destination.
“There is a very strong possibility that Blue Equity will make another investment in Jamaica before 2012,” said Jonathan Blue, chairman and managing director.
“However, our first priority is the absorption and integration of Cool Petroleum into our family of companies. We are really focused on that mandate at this time,” he said.
Shell generated an estimated US$370 million (J$32 billion) of revenues last year.
Blue Equity acquired control of Cool Petroleum at the top of the month in a deal with former co-owners, businessman Joey Issa and conglomerate Neal & Massy Holdings.
Blue said he expects Shell to turn a profit in the future following an undisclosed investment in the operations, reportedly at US$30 million. The investment resulted in reducing the debt of the company, he said.
“With a less leveraged company, the financial stability of the business is much brighter and with proper execution and with the things that Blue Equity will bring to the table as owners, the future for improved performance is very possible,” he said.
“Blue Equity is known for installing strong local management after an acquisition, strict adherence to policies and financial controls that have led to greater improved performance for investments that we have made in the past. This investment in Cool will be treated in the same light.”
Blue, who has taken over as CEO of Cool, declined to reveal an actual timeline for returning the company to profitability.
“Blue Equity is not a private equity fund with a required timeline for return of investment. We are patient investors and our goal is to maximise returns by building a better performing company over time,” he said.
Concurrently, Blue Equity will seek to increase its market share by expanding the network of gas stations, but again its CEO avoided specifics about the scope of the plans. Shell operates and owns some 50 gas stations nationwide, he said.
In 2005, when Shell Corporation sold out to Issa and Neal & Massy, Cool became the largest fuel retailer in Jamaica with more than 90 Shell and Cool Oasis locations.
The company has been losing money since the acquisition. In 2010, Cool Petroleum owed J$5 billion to bondholders amid total debt of J$10 billion or US$119.8 million. Its losses accumulated to J$833 million as debt servicing costs weighed on its bottom line.
The deal with Blue Equity did not include Cool Oasis network of 25 stations nor does it affect Issa’s ownership of Cool Corporation.
Blue will assume the role of chairman and chief executive officer of Cool Petroleum. The senior executive team will also include Steve Whittingham, and Rodney Davis as group financial officer.
Blue Equity is an independent, private equity firm whose investment portfolio includes oil and gas, media, distribution, health care, art, commerce, defence, financial services, and real estate assets.
Its interests in the Caribbean already includes Island Ice & Beverage Company Limited (IIBC), which manufactures and distributes packaged ice and various beverages in the region, including 750 locations in Jamaica through retail and wholesale channels.
IIBC operates industrial manufacturing facilities in Kingston and Montego Bay. Whittingham is its CEO.