JPS on Knutsford Boulevard in New Kingston
The Development Bank of Jamaica (DBJ) has advised that the Government of Jamaica (GOJ) is committed to selling its stake in the Jamaica Public Service Company Ltd (JPSCo), the island’s sole power distributor. However, timelines for the divestment project and method of sale are not yet determined.
JPSCo, which has assets of near US$1 billion and saw revenues of US $759.82 million in 2015, is owned 19.9 per cent by the GOJ.
Other shareholders are MaruEnergy JPSCO 1 SRL and EWP (Barbados) 1 SRL, each holding 40 per cent interest, and private individuals with 0.1 per cent.
The DBJ, which is home to the government’s divestment unit, said Friday that the GOJ had taken a policy decision to “divest itself of these types of commercial assets once the opportunities arise.
“The government has recognised that in order to build efficient and competitive markets, these types of privatisation initiatives should be undertaken.”
The DBJ said the divestment of the 20 per cent shareholding in the Jamaica Public Service “is intended to broaden the ownership base of assets in the country”.
It did not indicate the method of divestment to be undertaken.
The principal activities of the JPSCo are generating, transmitting, distributing and supplying electricity in accordance with the All-Island Electric Licence issued in 2011.
The Jamaica Observer asked JPSCo, via the company’s communication unit, if other shareholders had the right of first refusal, and if they were considering bidding in a future divestment.
The company declined to answer, stating, “As it happens, we cannot comment on such matters as they would be the subject of confidential discussions as well as the confidential agreements between the parties. Should the Government of Jamaica be divesting their shares, it is likely that the appropriate disclosures will be made in due course.”
JPS also declined to comment on the for sale value of the asset.
Shareholder MaruEnergy JPSCO 1 SRL is incorporated in Barbados and is ultimately owned by Marubeni Corporation, which is incorporated in Japan.
The other partner, EWP (Barbados) 1 SRL, is incorporated in Barbados and is ultimately owned by the Korea Electric Power Corporation, which is incorporated in South Korea.
The GOJ’s ownership in the JPSCo is held collectively through the Accountant General’s Department and the DBJ.
In relation to the schedule for divestment, the DBJ indicated that the Ministry of Finance and the Public Service (MOFP) “has been seeking an appropriate time for divestment of these shares in keeping with its policy. The steps to be taken will depend on the particular method chosen to dispose of the asset.”
JPSCo had total assets of US$933.74 million as at December 31, 2015.
Year-end revenues were US $ 759.82 million versus US$1.023 billion in 2014. Nevertheless, net income for the 12 months of 2015 came out 15 per cent per cent ahead of the prior year.
The company saw profit of US$26.51 million in 2015 versus US$23 million in 2014. Earnings per share were US$ 0.12 in the last year compared to US $0.11 in 2014.
BY AVIA COLLINDER Business reporter collindera@jamaicaobserver.com