DUBAI, 15 January 2005 — Abraaj Capital, one of the leading private equity firms in the Gulf region, has acquired 80 percent of Jordan Aircraft Maintenance Limited (Joramco) from Royal Jordanian Investment Ltd. for $55.1 million.
Royal Jordanian will continue to retain 20 percent stake in the aircraft maintenance company following the deal.
The sale and purchase agreement was signed at a ceremony at Joramco offices in Amman on Wednesday following a privatization process in which five prospective bidders were short-listed, Abraaj announced in Dubai. Royal Jordanian Chairman and Central Bank of Jordan Governor Umayya Touqan, Jordan Executive Privatization Commission Chairman Adel Kodah and Abraaj Capital Chief Executive Officer Arif Naqvi were signatories to the agreement.
“The privatization of Joramco is in line with our government’s vision. We strongly believe that Joramco will greatly benefit from its privatization and partnership with Abraaj Capital and we see a great future for the company in the times to come,” Toukan said in a joint statement. Kodah added: “This transaction that has been concluded in a transparent and competitive bidding environment, is a significant milestone in the privatization program. It is in line with our government’s vision of boosting investments and public private partnership.”
Naqvi said: “This acquisition is a significant milestone for the company and the region. Such public-private partnership initiative can play a significant role in expanding the capital markets, generating employment and boosting overall economic growth.”
Humayun Shahryar, executive director and head of direct investments at Abraaj Capital, described the acquisition of Joramco as the icing on the cake of the Buyout Fund having largely closed out the fund’s investment strategy.
He said the Middle East airline business was booming and expanding rapidly and the acquisition of every new aircraft in the region increases the maintenance, repair and overhaul business potential and thus Joramco’s prospects also.
Bashir Abdel Hadi, CEO of Joramco, said the privatization of Joramco was an important milestone in the evolution of an already profitable and growth-oriented company.
“We are one of just three companies in the region in our industry. In the near future we expect to see a dramatic surge in the business by focusing our resources and heavily investing in IT, infrastructure and marketing. We are also going to build a new hangar of 16,000 to 20,000 square meters to satisfy the market demand,” he said.
Naqvi said the region was about to witness additional sales of portions of public companies to private businesses.
Jordan, along with certain Gulf countries, has a lead in this regard and has seen significant benefits, including lower deficits, he said.
