7 months ago
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The Government of Jamaica will be offloading its $10-billion stake in TransJamaican Highway Limited, operator of the Highway 2000 East-West toll roads, and divesting outsourcing assets held by the Port Authority of Jamaica later this year.
The divestments will be done through the Jamaica Stock Exchange, JSE, Prime Minister Dr Andrew Holness said at the opening of the 20th JSE Regional Investments & Capital Markets Conference on Tuesday night.
The government will also consider “a reduction in the rate of tax on dividends from the current rate of 15 per cent”, he said, but made no additional comment in relation to that issue.
“The government will soon be divesting its 20 per cent holding in TransJamaican Highway Limited held through National Road Operating and Constructing Company Limited. This will be undertaken by a public offer for sale. That’s something that the capital markets can look forward to,” Holness said.
The highway stock, which was first listed in March 2020, the month that the COVID-19 pandemic emerged in Jamaica, has since tripled in value and is now trading in the $4 range. The toll road operator, as of Wednesday, was valued at nearly $53 billion in market capitalisation, at $4.22 per share.
TransJamaican holds a 35-year concession for the East-West toll corridor. Its total assets were last estimated at US$297 million ($47 billion0 last September, and the company was then on track to deliver bigger annual profits for year 2024 than the near US$24 million reported in 2023.
Tolls collected in 2023 amounted to more than US$75 million, while for the first nine months of 2024, January to September, collections topped US$60 million, putting it nine per cent ahead of the previous year.
Through National Road Operating and Constructing Company Limited, or NROCC, the government holds 2.5 billion of the 12.5 billion shares in issue. Those shares are valued at $10.55 billion at the current market price.
NROCC,’s 20 per cent holdings makes it the largest shareholder. Rounding out the top five are Jamaica Money Market Brokers Limited, 6.0 per cent; Musson Investment Limited, 4.9 per cent; NCB Capital Markets Barbados Limited, 4.4 per cent; and ATL Group Pension Fund Trustee Nominee Limited, 2.8 per cent. NCB Capital and its affiliates combined hold closer to 9.0 per cent of the shares.
Meanwhile, Port Authority of Jamaica, PAJ, will also be divesting its “BPO assets through public offer for sale via the JSE”, Holness said.
The PAJ is transferring its outsourcing assets to a new entity, referred to as ‘Newco’ for now, which will eventually be listed on the Jamaica Stock Exchange.
The outsourcing assets overseen by PAJ include 611,562 square feet of its own holdings, and an additional 240,714 square feet managed for the Factories Corporation of Jamaica. These assets are located in special economic zones in Montego Bay and the Portmore Informatics Park. The Port Authority’s BPO holdings are valued among its estimated $82 billion in total assets, but their size has not been disclosed, neither in the Jamaica Public Bodies report nor the PAJ’s annual report.
The policy of the government has been to facilitate public ownership of state assets via the stock market. Its two main listings in recent years were Wigton and TJH, which brought tens of thousands more investors into the market. Wigton was listed in 2019 at $0.50 and now trades in the $1.30 range, valuing the company at $14.6 billion.
The next big divestments are expected to be Jamaica Mortgage Bank and the sale of government shares in power utility Jamaica Public Service Company Limited. It holds nearly 20 per cent of the power utility’s shares.
Holness’ speech on Tuesday was filled with government achievements, challenges, and visions of the future, ahead of this year’s general election.
“The good economic results are translating to improvements in everyday living,” he said.
The PM also referenced the rise in the confidence indices as evidence of increased optimism in the economy.
The fourth-quarter confidence surveys witnessed a rebound in both consumer and business confidence. Consumer confidence rose four percentage points to reach 175 points, up from 168.4 points in the previous quarter. This level matches the index’s performance at the same time last year. Business confidence rose to 149.3 points in the fourth quarter from 132.2 points in the third quarter, also higher than a year earlier at 139.1 points.
The increase was driven by improved perceptions of business conditions, job prospects, and income expectations. The third quarter was largely affected by the passage of Hurricane Beryl in July, along with inflation.
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