4. Jordan Cement Factories
·
The Council of Ministers endorsed on January 14th 1998 the sale of 33% of the company’s total shares to the French Strategic Partner/ Lafarge for $102 million. Share transfer agreement was signed in December 1998, concurrent with a 1% of the shares sold at a subsidized price to the company’s employees.
·
On February 2nd 2002, the GoJ sold its residual ownership in the company amounting to 14.3% to the Social Security Corporation for JD 30.042 million. Accordingly, the company is currently totally owned by the private sector.
5. Jordan Telecommunications Company/ JTC
JTC privatization program was completed over four phases:
I.
Phase One/ Partial sale in 2000, encompassed the following:
·
Sale of 40% of the total shares, on January 23rd 2000, to the strategic partner JITCO (88% owned by France Telecom and 12% by the Arab Bank) for $508 million at $5.08 per share;
·
Sale
of 8% of JTC total shares, on February 29th 2000, to the Social Security Corporation for $102 million at $5.08 per share;
II.
Phase two/ Initial Public Offering/ IPO, in 2002 encompassed the following:
·
The Council of Ministers endorsed a decision on February 27th 2002 slating between 10-15% of the company’s total shares owned by GoJ for sale through Initial Public Offering.
·
On October 29th 2002, the first IPO in Jordan was concluded with a 10.5% of JTC total shares sale through the Secondary Market of Amman Stock Exchange at JD 2.35 per share with a 3% discount as an incentive for local retail investors. Retail investors acquired 3.5% of the shares; financial institutions acquired 7.0%; Gross proceeds amounted to around JD 58.273 million; dropping GoJ ownership in the company to 41.5%.
·
Trading in Amman Stock Exchange (ASE) started as of November 4th 2002;
III.
Phase Three/ Partial Sale in 2006:
§
The Council of Ministers endorsed on January 11th 2005 a decision to relinquish its residual stake amounting to 41.5% of the total shares in the company. On June 20th 2006, the sale of the following GoJ stake in Jordan Telecom Company was completed:
o
France Telecom, the key Strategic partner, acquired an additional 11% for JD 129 million; the deal was closed over two intervals: 10% on July 5th2006 at JD 5.5 per share; and a further 1% on November 29th 2006 at an agreed upon adjusted rate of JD 5.02 per share (including 2005 profits).
o
The Kuwaiti Al-Nour Company acquired on July 18th 2006, 10% of the company’s total shares for JD 116.5 million;
o
The Social Security Corporation acquired on July 31st 2006, a further 5% for JD 58.25 million; and
o
2.5% of the shares were offered for sale, between July 25th and August 3rd 2006 , at Amman Stock Exchange for Jordanians through a secondary offering whereby 0.9% was purchased.
o
Total Proceeds amounted to $443.15 million.
o
3% of the shares were allocated to the Jordan Armed Forces and Public Security Agencies.
IV.
Phase four/ sale of GoJ residual ownership:
·
On January 21st 2008 a further 11.6% of JTC shares were sold to the Social Security Corporation (SSC) for JD135.76 million, with 2007 dividends equally distributed between GoJ and SSC.
6.
Royal Jordanian
A. Restructuring Procedures 1999 :
·
The Council of Ministers endorsed, on July 15th 1999, a financial and institutional restructuring strategy for Royal Jordanian Corporation with the main objective of transforming RJ into a shareholding company totally owned by the GoJ to perform on commercial basis, in preparation for its privatization.
·
Stage one of the financial, institutional and legal restructuring was completed; Law no. 10/1969 creating Royal Jordanian Corporation was amended and a new Statute no. 31 (2000) was issued transforming RJ (aviation) into a public shareholding company totally owned by the government of Jordan.
·
Non-Core business was unbundled from core business, five units were carved for privatization and registered as independent companies totally owned by the Royal Jordanian Investment Company/ a government owned company; encompassing the following: Airports Duty Free Shops company, Jordan Airlines Training and simulations/ JATS, Aircraft catering Company, Jordan Airmotive Limited Company/ JALCo; and Jordan Aircraft Maintenance Limited/ JORAMCO; whereby Royal Jordanian retained 20% in each of the latter three companies. The privatization of these companies was concluded during the period 2000-2007 as mentioned in details for each transaction separately.
·
RJ core business, namely aviation, has been transformed in 2001 into a public shareholding company totally owned by the government and was registered, on February 5th 2001, under the new name: Alia/Royal Jordanian Airlines Company with an exclusivity agreement for 8 years extending over two/four - year intervals, to utilize the existing licensed routes.
·
An agreement was signed in 2001 with the Aviation and tourism workers syndicate to guarantee the rights for redeployed staff to the newly established RJI companies.
B. RJ Airline Privatization Procedures:
·
Phase one of Royal Jordanian Airlines privatization program was initiated in 1999. Yet owing to the deterioration in the aviation sector globally, the cabinet decided on December 20th 2001 to halt the implementation procedures pending the expected resolution of impediments to privatization, i.e. exogenous regional and global hurdles.
·
The GoJ decided, on May 4th 2005, to proceed with the second phase of the privatization program of the company;
·
The Council of Ministers approved, on July18th 2007, the privatization strategy involving the sale of up to 74% of RJ total shares, to be conducted through a local IPO with a concurrent institutional offering to local and non-Jordanian Financial Institutions.
·
The structure of the offerings emphasized a Jordanian ownership in the company no less than 51% of RJ stake, including the 26% the GoJ shall retain in the company.
·
The Cabinet approved on November 6th 2007 the JD 11.83 million capital increase through capitalizing the returned earnings; these shares were allocated to the GOJ by virtue of the Financial Surplus Law. Accordingly, the total shareholding capital reached JD 84.3 million.
·
On November 18th 2007, GOJ offered 59,905,079 existing shares representing 71% of the Company’s total issued share capital; the price range was set at JD 2.75-3.40 per share.
·
The Initial Public Offering (IPO) for the public in Jordan closed on December 3rd 2007, while it closed on December 7th 2007 for Jordanian and international institutional investors
·
The GOJ decided on October 16th 2007, to allocate 7.7% of RJ total shares (6,493,506 shares) to RJ employees fund at no cost, as an incentive to the company’s current employees.
·
RJ IPO recorded an unprecedented success as it recorded an oversubscription with over 30.000 retail Jordanian investors.
·
Total proceeds for the 63.1% sold shares through the Public and Institutional Offerings at JD 3.08 amounted to JD 164.5 million equivalent to $ 232 million.
·
Upon closing the deal, RJ ownership currently stands as follows:
o
Social Security Corporation 10%
o
Local retail investors 6%
o
Local Financial Institutions 3.5%
o
Regional Investors 9.5%
o
Foreign Investors 34.1%
o
The GOJ retained 29% of which 3% are allocated to the Jordanian Armed Forces & Security Agencies;
o
7.7% were allocated to RJ Employees’ Fund;
o
Trading in RJ shares began on December 17th, 2007 at Amman Stock Exchange.
·
The privatization program of Jordan has witnessed a further success in its record through the completion of RJ privatization achieving both the economic and social targets of the transaction.
7.
Airports Duty-Free Shops
·
The GoJ signed, on August 2nd 2000, a sale and concession agreement for 12 years with Aldeasa Spanish company for $60.1 million. The deal included a debt swap arrangement with a 50% discount rate for the Spanish debt to Jordan.
·
As stipulated by the terms of the agreement, Aldeasa pays an annual fee amounting to 8% of its annual sales to the Free Zones Corporation; in addition to investing around $3 million in renovating and developing the Duty Free Shops at the airports.
8.
Aircraft Catering Company
·
Upon a decision endorsed by the GoJ, share transfer agreement of 80% of the company had been signed, on August 1st 2001, with the British/ Jordanian consortium (Alpha/ Eastern Group for Investment and Touristic Development) for $20 million. Royal Jordanian retained 20% of the shares.
·
As stipulated by the terms of the agreement, Alpha pays an annual service fee amounting to 8% of its overall annual sales to the Free Zones Corporation in addition to an annual rental fee to the Civil Aviation Authority for the utilization of the Jordanian Airports facilities.
9.
Jordan Aircraft Maintenance Limited (JORAMCO)
·
Sale
, on January 12th 2005 of 80% of the company’s stake to the UAE Abraaj Capital for total consideration of $55.1 million. Royal Jordanian Investment Company will continue to retain 20% stake in the aircraft maintenance company.
10. Jordan Airline Training and Simulations ( JATS)
·
The GoJ endorsed, in June 2006, the sale of 80% of its stake in Jordan Airline Training and Simulations Company to the Eastern Group for Investment and Touristic Development in a deal worth US$14.750 million, the sale involves a debt swap with the United Kingdom Government with a 38% discount. Share Transfer Agreement was signed on July 27th,2006.
11. Jordan Airmotive Limited Company (JALCO)
·
The GoJ endorsed, in August 2006, the total sale of Jordan Airmotive Limited Company to the Jordanian “AviationTechnologicalAcademy” in a deal worth US$11.1 million. Share transfer agreements were signed on September 4th 2006.
12.
Royal Jordanian Air Academy
·
The cabinet endorsed, on December 17th 2002, the total sale of the company to Jordan International Real Estate and Tourists Investment Company for $5.6 million.
·
Share Transfer Agreement was signed on January 2nd 2003.
13. Queen Noor Civil Aviation Technical College
·
The Council of Ministers endorsed on April 8th 2003 the restructuring and privatization of Queen Noor Civil Aviation Technical College (QNCATC);
·
QNCATC was registered on January 9th 2007 as a shareholding company totally owned by the GoJ;
·
Share transfer agreement was signed on November 13th 2007 with RoyalJordanianAirAcademy for $4.2 million.
14.
Arab Potash Company/APC
·
GoJ endorsed, on November 27th 2001, the restructuring and privatization of APC, whereby 26% of APC total shares (equivalent to 50% of the 52% GoJ ownership in the company) were slated for privatization.
·
Shareholders’ and Share Transfer Agreements were signed with the Canadian PCS on October 16th 2003 . PCS acquired 26% of APC total shares for around US$173.3 million at $8 per share.
15.
Jordan Phosphate Mines Company
· The GoJ endorsed, on April 20th 2004, the privatization strategy of the company encompassing the sale of 40% of JPMC total shares; the government decided to retain the remaining 25.66% of its stake amounting originally to 65.66% of JPMC.
· On March 7th 2006, the Council of Ministers endorsed the sale of 37% of GoJ stake in the company to Brunei Investment Agency for $111 million at $ 4 per share.
· In accordance with the Royal Directives, the GoJ allocated 3% of its stake in JPMC to the Jordan Armed Forces and JPMC workers’ Funds at a preferential price.
· The Government retained its residual ownership in JPMC amounting to 25.6%.
16. Container Terminal - CT
· The Council of Ministers endorsed on December 4th 2003, the recommendation of ASEZA to engage the private sector in the management of the Terminal.
· A two-year management contract was signed with AP Moller on March 9th 2004, and a Memorandum of Understanding stipulating the conditions of a Joint Venture for 25 years following the completion of the two-year management agreement was also signed.
· A Joint Venture/Development Agreement between Aqaba Development Company (ADC) and Aqaba Container Terminal (ACT) was signed on July 29, 2006. ACT took over the management and operations of the terminal on September 15, 2006.
17. Agricultural Marketing and Processing Company
· Total sale contract signed on November 1st 2005 with a regional investor for JD 8.9 million.
18.Central Electricity Generating Company/ CEGCO
· The Council of Ministers endorsed on October 4th 1997 the Policy Statement for Power Sector Reform aimed at ensuring the flow of new investments to the sector; raising its efficiency in light of the projected increase in demand; and enabling the sector operators to perform on commercial basis. To further these objectives the Policy Statement included that the electrical sector will be reorganized such that generation and distribution and transmission & dispatch are managed by separate utilities/companies and that both generation and distribution companies would be privatized.
· On February 1st 1999,the National Electricity Power Company (NEPCO) was unbundled into three companies: Central Electricity Generating Company (CEGCO); the transmission & dispatch company (NEPCO) and Electricity Distribution Company (EDCO).
· The Electricity Regulatory Commission was established in January 2001.
· The Council of Ministers endorsed, on November 5th 2002, the privatization strategy of the electricity companies encompassing the sale of up to 60% of CEGCO, 100% of EDCO, and the government's shares amounting to 55.4% of Irbid District Electricity Company (IDECO). The GoJ decided to retain ownership of the transmission company NEPCO
· The Temporary electricity law No.64/2002 was endorsed and issued in the National Gazette on October 19th 2002.
· An approved financial restructuring encompassed raising the debt-equity ratio through raising the capitalization of the CEGCO by an amount of $140 million through a loan granted to the company from local banks and transferred to the Treasury through distributing part of the company’s special reserves whereby this amount is considered early proceeds linked to the privatization of the company.
· The Council of Ministers endorsed, on March 16th 2004 a decision to initiate the sale process of 51% of GoJ’s stake in CEGCO.
· Bidding process was initiated in April 2004. Pre-qualifications criteria included a condition for the bidding consortia to include a strategic partner with at least a 10% ownership. Due Diligence was conducted by three qualified investors between end September and end November 2004; one offer was received and was rejected by GoJ due to the low value of the bid.
· The Cabinet decided, in June 2005, to include financial investors in the bidding process and thus relax the condition of including a strategic partner within the bidding consortia;
· In light of the outcome of a market study conducted by the financial advisor, specific pre-qualification criteria reflecting the bidders’ financial capability and seriousness were introduced. Four potential investors were approached with the deadline for receiving offers set on August 23rd 2006.
· Two offers from two specialized consortia were received, one consortium withdrew; negotiations were conducted with ENARA consortium comprising Jordan Dubai Energy & Infrastructure as leader, and the Malaysian company Malakoff Berhad and Consolidated Contractors Group (CCC).
· The GoJ approved on May 8th 2007 the sale of 51% of CEGCO to Enara consortium; in addition to a further 9% to the Social Security Corporation, the GoJ retained 40% of the company.
· The deal with Enara consortium was closed on October 17th 2007 at $140 million – including financial settlement. The investor assumed 51% of the company’s debt amounting to $171 million on the date of signing the agreement).
· On November 18th 2007, sale agreement of 9% of CEGCo shares was signed with the Social Security Corporation for a total amount of $ 24.6 million including financial settlement. SSC assumed 9% of the company’s debt equivalent to around $30 million.
19. Electricity Distribution Company (EDCO)
20. Irbid District Electricity Company (IDECO)
· Within the framework of the privatization strategy endorsed by the Council of Ministers on November 5th 2002 pursuant to the sector restructuring in 1999, the privatization of both EDCO and IDECO was initiated on June 1st 2006 through an international bidding process encompassing the total sale of EDCO (100%) and the GoJ shares amounting to 55.4% of IDECO,
· In July 2007, three offers for IDECO were received, whereas, only one offer was received for EDCO.
· The Council of Ministers endorsed, on November 13th 2007, the sale of the two companies for $104 million to the Kingdom Electricity Company (KEC), a consortium consisting of: Jordan Dubai Energy & Infrastructure, United Arab Investors Company (UAIC) and Privatization Holding Company (PHC).
· Sale agreements were signed on November 18th 2007 and the deal was closed on July 2nd 2008.
21.Jordan Investment Corporation / JIC Portfolio
· Divestiture of the government’s shares in 51 companies yielding more than $170 million.