The Government of Jamaica (GOJ) is offering Jamaicans yet another opportunity to own assets that it previously held. Yesterday, the Ministry of Finance and the Public Service and NCB Capital Markets held a ceremony at the Jamaica Pegasus to spread awareness of the GOJ’s latest divestment.
In his remarks, Minister of Finance, The Hon. Dr. Nigel Clarke outlined the reasons for the divestment and provided information on the offer.
Reasons for the Listing
The major reason given for the divestment was the transferring of assets from public to private hands as the government focuses more on services that cannot readily be provided by the private sector.
The Minister alluded to other coming privitizations such as Jamaica Mortgage Bank and the divestment of the government’s stake in Jamaica Public Service (JPS). He also spoke to the updating of pension investment regulations in order to allow for institutional investors to participate in these offerings at the level they would like to.
Dr. Clarke detailed some of the long term aims of the Government’s privitization thrust. The first being to focus on the provision of services that cannot be provided by the private sector. He referred to country’s renewable energy initiative which started some 20 years ago with Wigton. The move was seen as a risky one that private entities would not have undertaken.
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Secondly, the privitization thrust seeks to broaden the ownership base of the Jamaican economy, i.e., giving Jamaicans an opportunity to own public assets. In the past, most of the privitazations done were with foreign entities, and while there will still be a place for that, it is the intention of the current JLP administration to see more Jamaicans owning public assets.
The third aim of the program is to bring more opportunities to the Jamaican investing public, particularly those that they were previously excluded from.
The fourth aim of the program is to support the deleveraging program. It is anticipated that as the debt goes down, so too will the need for financing.
With these aims in mind, the GOJ has committed to taking TransJamaica Highway Limited public. TransJamaica Highway limited commenced a partnership in 2001 with NROC for the planning, designing, construction and maintenance of several toll roads across the island.
TransJamaica Highway Limited could trump Wigton and Wisynco
There was no word on a specific date as to when we could expect the Prospectus however the company is being brought to market by NCB Capital Market Limited who will serve as lead arranger for the offer. Mr. Steven Gooden in his remarks stated that the TransJamaica Highway IPO is likely to be the largest in Jamaica’s history in terms of both number of applications and amount raised. He continued, saying that it is conceivable that the TransJamaica Highway IPO could garner as much as 90,000 applications trumping the current holder of that record, Wigton Wind Farms Limited (JSE : $WIG), which had ~31,000 applications. In order to achive this milestone, there will be a major push behind building awareness of the company and the opportunity. NCB Capital Markets also commits to approaching other brokerage houses as selling agents and will grant access to their digital GoIPO platform to improve efficiency in handling applications.
TransJamaica Highway Limited is cited as a classic infrastructure investment opportunity. The company was ascertained by PriceWaterhouse Cooper as one that is cash flowing well with potential for growth in revenues. Transjamaica Highway Limited could also benefit from The GOJ’s intention to spend J$100 billion on infrastructure projects over the next five years.