Miami-based company seeking funds for Cuba business
Adding to a growing number of businesses positioning themselves for a Cuba opening in the United States, a Miami-based entertainment entrepreneur is taking his Cuba business public.
Through a reverse merger, Hugo Cancio announced he plans to integrate his startup Cuba Business Development Group Inc. (CBDG) into pink sheet-listed Fuego Enterprises Inc. by July 28, to “access U.S. capital markets and make further inroads in Cuba.”
“In anticipation of what we believe is inevitable — the lifting of U.S. trade and travel restrictions, which I think will be happening within three to five years — we are positioning ourselves to do business with Cuba,” Cancio said.
Cancio says he expects to sell shares worth at least $5 million in the near future, adding that his 12-employee company already has “sufficient money to accomplish some of the things we want to get accomplished,” after securing investments from Miami-based Herzfeld Caribbean Basin Fund and another fund he declined to identify.
In its last annual investment report on Dec. 31, 2011, Herzfeld listed 377,100 shares of Fuego Enterprises, at a market value of $4,100, and 100,000 non-listed shares in Cuba Business Development Group, without attaching a value.
The Havana-born entrepreneur, 48, is known mainly for organizing U.S. tours of Cuban stars such as Silvio Rodríguez and Pablo Milanés, via his Fuego Entertainment.
Concert tours aside, the combined company includes revenue-generating businesses On Cuba, an in-flight magazine, and www.mascell.com, which offers mobile phone reactivation services. Cuba Business Development Group also plans to offer Cuba consulting for U.S. companies, and provide cargo shipping services through its Universal Network Operations Cargo Inc.
CBDG has a U.S. license to export telecommunications equipment to Cuba, but it hasn’t begun to be active in this line of business.
According to Cancio, his magazine reaches 95 percent of passengers traveling from U.S. airports to Cuba. He says On Cuba is sold at airport stores in Miami, New York, Atlanta, Los Angeles and elsewhere, and it is distributed on all U.S. Cuba flights except those operated by American Airlines.
“On Cuba is generating sufficient revenues in terms of advertising,” he said.