The International Finance Corporation (IFC), a member of the World Bank group, on Monday, December 11, announced the signing of a $8 million loan agreement with Boscan Jordan Group (BJG) as part of a larger financing package.
The agreement was signed by Brian McNamara, IFC senior investment officer for Central Asia, Middle East and North Africa, and Charlie Chang, chairman and executive director of BJG.
“Basically this is a landmark transaction with the IFC's involvement in this fast growing sector.
“This comes as a part of a private placement. We are currently in the process of raising equity share capital for BJG; this is part of the overall process.
“The IFC package is a combination of equity and debt financing totalling approximately $15 million,” said Omar Masri, Managing director of Atlas Investment Group, BJG's sole financial adviser.
“As you know, Jordan is betting on several engines of growth in the coming few years and the QIZs are obviously a key to revive the stagnant economic growth in Jordan; Boscan is leading that charge very successfully,” said Masri.
The package will finance the construction of two new luggage manufacturing companies in the Irbid Qualifying Industrial Zone. It is expected to inject new activity into the QIZ and boost Jordan's exports to the US.
“This is a major expansion of our current project in Irbid. We are employing over 3,000 staff at the moment and with this transaction we are going to double or triple our employment over the next several months.”
Boasting successful growth, Chang, whose company started work in the Kingdom less than two years ago, said he was expecting the trend to continue for the next 3-5 years.
“With the assistance and the cooperation with the IFC we feel that this momentum is going to be even stronger,” said Chang.
“BJG commands roughly 50 percent of the Irbid QIZ exports, in dollar terms. The QIZ in 1999 exported around $11 million worth of products, but this year it will export around $80 million, of which $40 million is expected to be from BJG,” said Masri.
The IFC is the largest multilateral source of loan and equity financing for private sector projects in the developing world. The IFC finances and provides advice for private sector ventures and projects in developing countries, in partnership with private investors.
Moreover, the IFC's advisery work helps governments create conditions that stimulate the flow of both domestic and foreign private savings and investments. Since its founding in 1956, and by June 30, 1999, the IFC had committed more than $26.7 billion in financing and has arranged $17.9 billion in syndications and underwriting for 2,264 companies in 132 developing countries.
BJG is a Jordanian holding company operating in Al Hassan Industrial Estate and is one of the fastest growing, largest exporters to the United States. It owns 100 percent of one subsidiary, International Luggage Manufacturing Company I (ILMC I), and is now in the process of establishing other two fully owned subsidiaries, ILMC II & III.
The Irbid QIZ was established in March 1998 with a special economic status which secures the zone's qualifying products duty and quota free access to US markets. ¯ (Jordan Times)
© 2000 Mena Report (www.menareport.com)
