January 23, 2020 Steven Jackson/Senior Business Reporter
Investors can expect the release of the prospectus for TransJamaican Highway and its possible listing in February, according to Prime Minister Andrew Holness.
TransJamaican is already projected to be the largest initial public offering of shares , or IPO, ever on the Jamaica Stock Exchange, JSE.
In another first for the market, it was also announced at the opening of the annual JSE Investments and Capital Markets Conference on Tuesday night that coffee company Deaf Can! would become the first to list on the social stock exchange following a donation by NCB Foundation and NCB Capital Markets valued at about $7.5 million. Deaf Can!, a non-profit venture which provides jobs to the deaf community, is using the funds to set up a farm to supply beans to third-party cafés that its baristas work in.
The JSE launched the Jamaica Social Stock Exchange last January but no project received sufficient funding to list until Monday’s announcement.
As for the TransJamaican IPO, that transaction is already touted to raise at least two times more than the $5.5 billion garnered by the Wigton IPO. Both are state assets that the Government has chosen to privatise via the stock market.
PM Holness, speaking at the opening of the JSE conference, said of the TransJamaican IPO: “It will be listed shortly, and I am hoping sometime in early February. It will be another opportunity for Jamaicans to invest in a piece of Jamaica.”
Investors had expected the toll road concessionaire to go to market before the end of the fiscal year, that is, ahead of March, but PM’s announcement makes the timeline more precise.
The East-West leg of Highway 2000, has good traffic flow and revenue stream, said Holness of the toll concession. TransJamaican was controlled by French company Bouygues Travaux Publics, but Holness administration is yet to disclose the details of the takeover.
The ordinary shareholders in TransJamaican included Bouygues Travaux, with 13.2 million of 27 million ordinary shares; Vinci Concessions of France, with 6.8 million; International Finance Corporation, the private sector-funding arm of the World Bank, with 4.6 million; and Societe de Promotion et de Participation Pour la Coopération Economique SA of France, 2.4 million shares. Jamaica’s state agency NROCC held a single preference share that gave it a veto over decisions related to the concession.
The TransJamaican Highway IPO is set to raise more than $11 billion. NCB Capital Markets, which was selected to arrange the TransJamaican transaction, also expects the IPO subscriptions to triple the 30,000 that flocked to Wigton – which would make it the most sought-after IPO in local history.
Holness remarked that one of the explanations for the anecdotal lacklustre spending in December was that instead of buying the latest “Gucci or Prada”, Jamaicans had been saving up for the next IPO.
He then segued into a report on the economy, saying interest rates are at low single-digit levels compared to the nearly 50 per cent levels in the 1990s, the country’s debt-to-GDP ratio was the lowest in decades at 93 per cent, and that Jamaica has had 19 quarters of consecutive growth, albeit at a low level.
Those outcomes follow a period of adjustment for Jamaica under two programmes with the International Monetary Fund.
“Now is the time to truly show the world that we deserve the accolades and that we will stick with the plan,” the PM said.