Jordan Telecom to start sale talks

The government of Jordan’s financial advisers are to hold meetings with US, European and Gulf investors this week, as it prepares to offload its stake in the kingdom’s monopoly telco.

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By  Richard Agnew Published  March 12, 2006

The government of Jordan’s financial advisers are to hold meetings with US, European and Gulf investors this week, as it prepares to offload its stake in the kingdom’s monopoly telco. The state currently owns 41.5% of Jordan Telecom, but has appointed Goldman Sachs to review ways to sell off its holding. Options being considered include a sale to private investors in Jordan or elsewhere in the Gulf, as well as a flotation on an international exchange. “The government will try to maximize the sale inside Jordan,” Dr. Shabib Ammari, chairman of Jordan Telecom, told Arabian Business. “We’d like to see Jordan Telecom being owned mainly by Jordanians, to spread the benefits of privatisation among Jordanians. But we want to make sure that we get the deal concluded at the right price.” Currently, the government is thought to favour a sale of 11% of the firm to Jordan’s Joint Telecoms Investment Company, which is backed by France Telecom. This would give the French giant control of the group, but in return, it would pay a premium on the shares. The government is also planning to sell 3% of Jordan Telecom to employees in the kingdom’s security services, at a discounted price. Negotiations over the state’s remaining 27.5% stake are set to start this week, according to Dr. Ammari, who represents the government on Jordan Telecom’s board. “It is in the best interests of the company to widen its base of shareholders,” he said. “We will start a roadshow on March 14 that will cover seven cities in the Gulf, as well as London, New York and Washington, where Goldman Sachs will arrange meetings with potential investors.” He also denied that any deal had been agreed to list the shares on Dubai’s new International Financial Exchange, as suggested by recent reports. “Dubai is one of the cities they will visit. But I am not aware of parallel negotiations between Dubai and the Jordanian government,” he added. The move comes amidst an organisational restructuring of Jordan Telecom, whereby the firm is bringing its separate business units under one administrative umbrella. Dr. Ammari said the move, due to be completed this year, would start to impact its cost base from the second half of 2007. “We are trying to maximise productivity and ensure that different strategies — marketing in particular — are in line with each other. Administratively, we need the freedom to offer bundles of goods, and on the supply side, to minimise costs. The Europeans, especially France Telecom, have been developing this concept over the last couple of years.” The transfer of control to France Telecom is also likely to see the Jordanian group expand its operations abroad. Dr. Ammari said the company was in the process of finalising an agreement to start offering telecoms services to companies in Bahrain, and was reviewing a bid for a fixed line licence in Egypt.

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