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Brunei to sell 37% stake in Jordan Phosphate to two Indian Firms

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Published on : May 28, 2018

The wave of privatization has been spreading fast across Jordan together with the public dissatisfaction fueled by nationalism, which has been increasing in equal measure. Against this background, Jordan Phosphate Mines Co. has for quite some time mulling over divestment to make up for the huge financial losses. According to the Amman stock exchange, the major shareholder of the Amman-based mining company, Brunei Investment Agency, announced on May 27, 2018 that it has struck a deal to sell a 37 percent stake to India-based prominent importers and producers of fertilizers for over $130 million.

Indian Fertilizer Firm to buy 30.5 million shares valued at 2.98 dinars

The stake will be sold to Kisan International Trading FZE and Indian Potash Limited, the parent company of both being Indian Farmers Fertiliser Cooperative (IFFCO). The stakes were bought by the investment company two years ago in 2006 from Jordan when investors in Brunei was planning to secure sizeable foreign funds against the regulations by IMF. For long, the mining company has been making sizeable losses and hence Brunei has been planning to divest its stake. Of note, Jordan had wanted to regain the control of the company but things didn’t work out for some reason.

According to the announcement, the proposed transaction consists of selling 30.5 million shares to the Indian buyers, pegged at 2.98 dinars (US$4.20) per share. According to industry strategists familiar with the matter, among the companies who had intended to buy the stake were Potash Corp, Canada-based company and a Japanese multinational company Mitsubishi Motors.

Deal part of Measures taken by Holder of Jordan Phosphate Mines to contain its Burgeoning Losses

The deal has great significance for the fertilizer industry since Jordan Phosphate Mines is one of the biggest worldwide producers of phosphates and the rock phosphates it produces is used to make crop fertilizers. The public shareholding limited company has for the past couple of decades has been entering into collaborations and seeking joint ventures with producers in India and Japan, which helped it meet rising consumer demand. In the meantime, it has adopted major restructuring to reduce its debts and losses.