Amman moves on sell-offs

13 April 2006

Amman is making steady progress with its privatisation programme across the telecoms, power and industrial sectors, Mohammed Abu Hammour, chairman of the Executive Privatisation Commission (EPC), told MEED on 8 April.

In the telecoms sector, the government has completed the sale of an 11 per cent stake it held in Jordan Telecom (JT) to France Telecom (FT), Hammour said. The government also finalised the sale of a further 3 per cent in JT to the armed forces pension fund. FT now holds a 51 per cent stake in JT. The government holds 30.5 per cent, while the Social Security Corporation owns 12.4 per cent and 6.1 per cent is listed on the Amman Stock Exchange (ASE).

According to Hammour, the EPC is in negotiations with two investors to purchase a further 25 per cent of the government's stake in JT. Bidders are understood to include Bahrain's Gulf Finance House and Amman-based Arab Supply & Trading Company (Astra).

Should negotiations be unsuccessful, the shares will go to a secondary offering. The process is expected to be completed by mid-June. A further 2.4 per cent of the government's stake is planned to be listed on the ASE.

Amman is also planning to restart negotiations with strategic investors over the sale of a 51 per cent stake in Central Electricity Generating Company (Cegco).

According to Hammour, the value of the Cegco sale is estimated at $120 million and the government is aiming to privatise the company by August. The stake will be re-offered to four or five investors, including at least two Gulf-based financial investors.

Negotiations between the Energy & Mineral Resources Ministry and India's Reliance Energy broke down earlier this year, delaying the government's plans for the energy sector. The Cegco sale had been expected to be completed during 2005 and was to be followed by the sale of a 100 per cent stake in Electricity Distribution Company and a 55.4 per cent stake in Irbid District Electricity Company (MEED 31:3:06).

In the industrial sector, Amman concluded on 29 March the sale of the government's remaining 37 per cent stake in Jordan Phosphate Mines Company (JPMC) to the Brunei Investment Agency at $4 a share.

The transaction involved the sale of 27.75 million shares, 37 per cent of the company's 75 million total. The value of the transaction was $111 million (MEED 10:3:06).

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