JPMC To Issue $57Mn In Bonds

VOL. XLV

No 27

8-July-2002

JORDAN

JPMC To Issue $57Mn In Bonds

The Jordan Phosphate Mines Company (JPMC) is to issue two bonds of a total value of JD40mn ($57mn) in Jordanian dinars and US dollars to partially repay a $100mn bond issued in 1997 which matures in August. The issue, which will be managed by Jordan Investment Trust (Jordinvest), is expected in mid-July and will be listed on the 'Amman Stock Exchange. The JD issue will bear a fixed interest rate of 8%, while the dollar issue will bear a floating interest rate equal to 6-month Libor plus 3%, a press release from Jordinvest said. The final amount of each issue will be determined by market demand.

Jordinvest CEO Henry Azzam has said that he expects the JPMC bonds to be well-received both in Jordan and abroad due to their attractive interest rates and relatively short maturity. He also expects recent improvements in JPMC’s financial results and the possible imminent privatization of the company to increase interest among investors. The new issue is designed to improve the liquidity and financial position of JPMC, which recorded losses of JD128mn ($182.9mn) in 2000 and only managed a profit of JD4mn ($5.7mn) in 2001. However, JPMC Director General Khalid Shiyyab forecasts better performance for 2002 due to increased production and sales and cuts in administrative and production costs. The Jordanian Government is currently considering selling a 40% stake in JPMC to Canada’s Potash Corp. of Saskatchewan (PCS) as part of its privatization scheme recommended by the IMF to reduce government debt. PCS had offered to buy the government’s whole stake of 65.661% in JPMC, but the offer was turned down and replaced with the proposal to buy a 40% share. If the deal goes through, the state-run Jordan Investment Board will hold a 25.661% stake in JPMC with the rest in private hands.