Ringing in new owners for Jordan Telecom

10 March 2006

France Telecom is expected to become on 12 March the majority shareholder in Jordan Telecom with the purchase of an additional 11 per cent stake from the government. France Telecom already holds a 40 per cent stake in Jordan Telecom through the local JITCO, which is 88 per cent owned by the French operator and 12 per cent by Arab Bank. The government holds 41.5 per cent, while Jordan's Social Security Corporation owns 12.4 per cent and 6.1 per cent is listed on the Amman Stock Exchange.

France Telecom manages the Jordanian operator and is expected to pay JD 5.50 ($7.75) a share for the 11 per cent stake, with an option to buy a further 9 per cent by the end of March. Of the remaining government stake, 3 per cent will be sold to the armed forces at a discount and the rest will be offered to the public.

'France Telecom will pay a premium for control, but other shareholders won't have that leverage. The purpose is to spread the benefits,' Jordan Telecom chairman Shabib Ammari told MEED on 6 March.

Goldman Sachs is advising the government on the sale and Arab Jordan Investment Bank (AJIB) is the local underwriter. The offering is expected to be concluded by the end of April.

Jordan Telecom is considering a dual listing and has applied to list on the Dubai Financial Market but the board has not finalised the decision. 'We want to minimise foreign exchange risk and the transaction cost,' Ammari said. The company is considering an alternative listing on the Dubai International Financial Exchange (DIFX).

Jordan Telecom underwent a restructuring in early 2006 and plans to expand operations across the region. 'If we go big, we'd like to join hands with our strategic partner France Telecom and local partners,' said Ammari. 'There is an opportunity in Egypt and Saudi Arabia [to bid for a second landline licence]. We are aware of it and are thinking about it.'

Jordan Telecom is also in negotiations for two projects in Bahrain involving IT and voice services, which are expected to be concluded by the end of the second quarter of 2006. Domestically, the company expects to agree network tariffs by the end of March with internet service provider (ISP) Batelco Jordan, a subsidiary of Bahrain Telecommunications Company. 'Tariffs are based on cost. We want to keep them (Batelco Jordan) as partners and not push them to build their own network,' said Ammari. (MEED 24:2:06)www.meed.com/telecomsit

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