Jordan Investment Corporation takes another step towards privatization
The Jordan Investment Corporation (JIC) announced on Tuesday, November 21, that it plans to sell its shares in ten more companies next year, opening the door to a new round of privatization.
The JIC, the government's investment arm, currently maintains stakes in 33 companies, but it intends to pull out from the tourism sector by the end of 2001.
“Of tourist investments, the corporation now owns one hotel, which is slated to be sold next year,” said JIC Director General Mohammad Bataineh.
“As for the service sector, we plan to sell our 8.5 percent stake in JETT, in addition to our equity in the General Maintenance Company,” added Bataineh.
Other investments the JIC will withdraw from include some industrial companies such as the National Textiles and Plastic Industries Company, the Tomato Paste factories and Jordan Paper and Cardboard Factories Company.
In addition, the JIC's 15 percent stake in the Jordan Press Foundation is presently being sold on the Amman Stock Exchange (ASE).
The sales process, he explained, targets a zero-equity in the JIC's current investments, eventually removing JIC from ownership in these bodies.
According to Bataineh, the corporation's capital gains since it launched its sell-off policy in 1993 to date amount to JD110 million.
The law stipulates that fifty percent of sales revenue is channelled to the treasury, while the remaining goes for reinvestments in economic and infrastructure projects, the latter of which are of a long-term and low revenue nature.
However, since 1998, the JIC halted the reinvestment trend in economic projects, and currently plans to utilise the capital gains in building infrastructure projects, like water works.
This year, the corporation sold-off equity in various investments, including the Coral Beach Hotel and the Amman Marriott.
The state's hands-off policy falls under the privatisation scheme adopted by the Kingdom as part of the IMF-backed economic restructuring programme.
The 12 year-old corporation, is the successor of the Pension Fund, left JIC investments with over 60 companies.
But, asked whether the corporation will disband when it fully sells its shares in local companies, Bataineh explained that the JIC still has to follow up the government's shares in Arab investments.
“Theoretically, the JIC will dissolve in few years. But in practical terms it has to look after the government's shares in common Arab projects, such as Arab Company for Drug Industry and Medical Appliances (ACDIMA), where its investment is bound by Arab League protocols,” he told the Jordan Times in an interview.
In addition, Bataineh noted that the JIC will continue to manage shares in strategic companies like the Jordan Phosphate Mines Company, the Arab Potash Company, and the Jordan Petroleum Refinery Company.
In this context, Bataineh referred to an earlier statement by Prime Minister Ali Abul Ragheb in which he denied intentions to privatise large industrial companies. Adding instead, that the government will offer a portion of shares on the ASE in efforts to upgrade the performance of these companies. — ( Jordan Times )
By Rana Awwad
© 2000 Mena Report (www.menareport.com)