Jordan TImes
Tuesday, October 13, 1998
Agreements on restructuring debt-ridden RJ in eight months
AMMAN (J.T.) — Royal Jordanian on Monday signed agreements with two consortiums to financially, legally and technically restructure the indebted national airline in eight months at a cost of $2 million, funded by the World Bank.
According to the deal, the French Banque Paribas working in conjunction with SHA, an American consulting agency specialised in civil aviation, and the British legal group Clifford Chance, together with British legal consultants Line and Partners and a local Jordanian legal firm, will design and implement a programme for restructuring and privatising RJ.
Banque Paribas and Clifford Chance, which won the deal in an internationally floated tender, will now embark on evaluating the airline's assets, restructuring the balance sheet, recommending ways to handle RJ's JD700 million debt, setting up a debt-free subsidiary and eventually selling off a major stake, between 40-60 per cent, of the new entity to a strategic partner.
Last month, the government gave RJ the go ahead to finalise the agreements.
The agreement, which was signed by the head of the Prime Ministry's Executive Privatisation Unit, Adel Qudah, and John Mitchel and Andrew Matthew for the consultancy consortium, will lead to the creation of two companies.
The operating subsidiary will handle the aviation part of the business and will include the planes, routes and technical support.
The remaining operations of the airline, such as the duty-free shops, engineering and maintenance services and catering, will be part of a government-owned holding company which will represent the government's share in the new subsidiary.
The signing ceremony was attended by RJ's Chairman of the Board Walid Asfour, the airline's Chief Executive Officer Nader Dahabi and French Ambassador to Jordan Bernard Emié