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April 25, 2008 |
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AIR JAMAICA: Gov't to Launch Int'l Bidding Process for Airline The Jamaica Information Service reports that Jamaican Prime Minister Bruce Golding told the House of Representatives that an international competitive bidding process will be launched to identify prospective investors for Air Jamaica. As reported in the Troubled Company Reporter-Latin America on March 12, 2008, the Jamaican government set a March 2009 deadline for Air Jamaica's privatization. Jamaica's Finance Minister Audley Shaw said a divestment committee was formed and is being supervised by Minister Without Portfolio in the Finance Ministry Senator Don Wehby. The Jamaica Information Services relates that Prime Minister Golding said during his presentation in the 2008/09 Budget Debate in the House of Representatives on April 22 that the services of the International Finance Corp. have been engaged as consultants/advisors in the divestment process. Prime Minister Golding told the Jamaica Information Service that the overall objectives of the divestment exercise include: -- the transfer of complete or substantial majority ownership and full management control of the airline to the private sector; -- the recapitalization of the airline; -- retention and long-term sustainability of Air Jamaica as the national carrier; and -- structural or contractual linkage to a major global carrier. The government reportedly wants to divest Air Jamaica by the end of the 2008/09 fiscal year. "It is a key airlift provider [Air Jamaica] for the tourist industry. It is our flag carrier and Jamaicans, especially those in the Diaspora, are emotionally attached to it. However, we cannot continue to pile up these losses on the backs of the Jamaican taxpayer with no end in sight. If we are able to relieve the taxpayers of the annual losses incurred by Air Jamaica, it will save the taxpayers more than J$10 billion per year," Prime Minister Golding told the Jamaica Information Service. Headquartered in Kingston, Jamaica, Air Jamaica -- http://www.airjamaica.com/ -- was founded in 1969. It flies passengers and cargo to almost 30 destinations in the Caribbean, Europe, and North America. Air Jamaica offers vacation packages through Air Jamaica Vacations. The company closed its intra- island services unit, Air Jamaica Express, in October 2005. The Jamaican government assumed full ownership of the airline after an investor group turned over its 75% stake in late 2004. The government had owned 25% of the company after it went private in 1994. The Jamaican government does not plan to own Air Jamaica permanently. * * * As reported in the Troubled Company Reporter-Latin America on June 12, 2007, Moody's Investors Service assigned a rating of B1 to Air Jamaica Limited's guaranteed senior unsecured notes. On July 21, 2006, Standard & Poor's Rating Services assigned a "B" long-term foreign issuer credit rating on Air Jamaica Ltd., which is equal to the long-term foreign currency sovereign credit rating on Jamaica, based on the government's unconditional guarantee of both principal and interest payments. |
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