Royal Jordanian says IPO oversubscribed
Royal Jordanian's (RJ) initial public offering has been oversubscribed, with total offers reaching $232 million from Jordanian and foreign investors, the company said on Tuesday.
Trading in the airline's shares will begin on December 17.
The government is selling up to 59.9 million shares -- equivalent to 71 per cent of its stock at an offer price of 3.08 Jordanian dinar per share, within its price band of 2.75 and 3.40 dinars.
Company officials said the IPO, which was launched on November 19, drew wide interest from both Jordanian and the Arab Gulf investors with over 50 percent from non-Gulf investors.
"The strong interest we received from local, regional and international institutional investors reflects the confidence investors have in RJ's future and the Jordanian economy," Nasser Lozi, chairman of the airline, told Reuters.
Lozi said the equivalent of 37.6 million shares went to regional and international institutional investors with 16 million shares to the M1 Group, a Beirut-based investment firm domiciled in Dubai controlled mostly by the Mikati family.
The remaining shares went to Jordanian retail and institutional investors, including 6.49 million shares to RJ employees and 8.4 million shares to the state pension fund.
The government will retain a 26 per cent stake under its accelerated privatisation scheme for RJ, part of a broader plan to sell sizeable state assets.
Foreign investors can buy up to 49 per cent of the airline with the rest kept in private Jordanian hands to ensure the carrier maintains its right to fly under bilateral accords. A plan for a private placement or strategic investor was abandoned in favour of the IPO.
RJ forecast transporting a total of 2.3 million passengers in 2007 against 2 million in 2006.
The airline's strategy was to create Amman as a regional hub for the Levant region by expanding its regional network and tap booming air passenger demand in the Middle East. (REUTERS)
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