TransJamaican
Highway IPO
February 17, 2020



Offer Details

TransJamaican Highway IPO – Now Open!

TransJamaican Highway Limited (“TJH”) (the “Company”) is a wholy-owned subsidiary of National Road Operating and Constructing Company Limited (“NROCC”). NROCC is ultimately owned and controled by the Government of Jamaica (“GOJ”). The Company operates in Jamaica under a Concessionary Agreement which give them the exclusive right to operate and maintain the Toll Roads of “Highway 2000 East-West”.

The Selling Shareholder (NROCC) is seeking to raise approximately J$11 billion in an Initial Public Offer through the divestment of 80% of the shares of TJH through listing on the Jamaica Stock Exchange’s (“JSE”) Main Market.

Download TransJamaican Highway IPO Prospectus

Fair Value and Recommendation

We performed a valuation exercise on the shares of TJH which utilizing Free Cash Flow to Equity (FCFE) Method. The valuation methods assumed an investment horizon of seventeen (17) years and utilized our estimates for the Company’s performance between FY 2020-FY 2036. This is since the company is currently under a Concessionary Agreement that is set to expire in 2036, which they have indicated they will opt to extend for another 35 years.

The Free Cash Flow to Equity method we believe is the most appropriate for this offer, under the basis that there will be a major refinancing of the company’s current debt for which their covenants are restrictive to how actual cash is utilized by the Company. Indicated accounts under the debt structure needs to be satisfied before any cashflows of net profit after tax (NPAT) can be distributed to shareholders in the form of dividends. As such, we access the potential availability of funds for distribution, the FCFE will allow us to sufficiently determine the value being derived by shareholders by being shareholders in the Company. Using a Market Multiple Valuation for this type of transaction would be inappropriate given there is no readily available comparable for this type of structure on our local stock market.

As such, the result of our FCFE valuation was an estimate of US$0.0124 or J$1.74, which provides a implies a potential upside of approximately 23%.

Listing PriceUS$ 0.0100
Estimated Fair ValueUS$ 0.0123
Implied Price Upside23.00%
RecommendationPARTICIPATE

View TransJamaican Highway IPO Analysis

Disclaimer: This review is for information purposes only. The information stated herein may reflect the opinion of the analyst. Any opinion, estimates or forecasts reflects judgment as at the date of the report in relation to available data and market conditions. This does not constitute any representation or warranties in relation to investment returns and the credibility of the sources of information relied upon in the preparation of this report, without further research and verification. The value of any securities or securities for any issuer referred to in this document may rise or fall for several reasons including but not limited to market conditions. Before making any investment decision, please consult an investment advisor at Barita Investments Limited.

TransJamaica IPO – Apply Now

Here’s a quick guide on how to apply for the TransJamaica IPO

Step 1: Visit https://goipo.jncb.com to complete the online application.

Step 2: Take screenshot of the confirmation screen or confirmation email, save and upload below.

Step 3: Make payment (be sure to add relevant fees noted under the electronic transfer details).

Electronic transfer:

In branch:

  • Cash (less than $100,000)

Step 4: Complete the form below and submit.

Step 5: Retain proof payment and reference number.