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| CTI Group II |
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| Summary of Proposed Investment |
| This Summary of Proposed Investment is prepared and distributed to the public in advance of the IFC Board of Directors’ consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC’s activities, and this document should not be construed as presuming the outcome of the Board decision. Board dates are estimates only. |
| Project number | 26878 |
| Company name | CTI Group Inc. |
| Country | Jordan |
| Sector | Transportation and Warehousing |
| Environmental category | B |
| Department | Infrastructure |
| Status | Pending Approval |
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| Date SPI disclosed | May 8, 2008 |
| Projected board date | June 9, 2008 |
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| View Environmental & Social Review Summary (ESRS), click here |
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| Overview |
Sponsor/Cost/Location |
Development Impact |
Contacts |
Attachments |
| Project description |
| Ranked among the largest specialized cement carrier fleet owners in the world, CTI Group Inc.’s (CTI or the company) activities cover all aspects of logistics for the specialized cement trade including trading, handling and transport, as well as operating a fleet of 9 dry bulk carriers. Operating on a global basis, the company is embarking on an expansion program to expand its fleet of cement and dry bulk carriers. IFC’s financing would be used to cover part of the costs of acquiring the additional vessels, beginning with the purchase of a cement carrier which the company is already operating on a bareboat charter basis. This expansion will help CTI optimize its fleet structure and expand its transport operations. |
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| Project sponsor and major shareholders of project company |
| CTI is structured as a holding company incorporated in the Cayman Islands. The Group is owned by two well-reputed Jordanian entrepreneurs who come from families with extensive business experience in Jordan, the Kawasmi and Dajani families. |
| Total project cost and amount and nature of IFC's investment |
| IFC’s proposed investment in CTI is an A loan of up to $11 million, a B loan of up to $14 million and a $5 million convertible loan. These would be used towards the Project cost which is estimated to be $37.5 million. |
| Location of project and description of site |
| CTI’s fleet of cement and dry bulk carriers operate on a global basis. Historically, CTI’s fleet has served the following countries/regions: Egypt and Red Sea region, India, Pakistan, Sri Lanka, Qatar and the Gulf, USA, and the Mediterranean and Black Sea regions. CTI’s management is headquartered in Amman, Jordan. |
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| Anticipated development impact of the project |
| The company has had positive economic and developmental impacts and the current project is expected to facilitate this. By shipping and trading cement between countries with cement production surpluses (and low prices) and countries facing shortages (and high prices), the Group allows both sides to benefit and enhances the efficiency of the global cement market. The project will facilitate cement exports from countries with excess supply (like Pakistan, China and India) to countries where there is a shortage of cement production capacity (like the US and the Middle East). Therefore, both the cement industry in exporting countries and the construction industry in importing countries would benefit from the Project. With an estimated 6-7% market share of specialized seaborne cement carrier trade, CTI is a significant player but not one of the largest, so its activities contribute to making the industry more competitive. |
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| IFC's expected development contribution |
| IFC’s long term financing will help fill a critical funding gap and allow CTI to match its long term assets with long term finance which remains unavailable in the local capital market. The success of this project would serve as a demonstration effect for local banks looking to finance shipping companies in the region and may encourage them to consider longer tenors for such investments. The successful penetration of a global and competitive market by Jordanian entrepreneurs could induce other entrepreneurs in the region to emulate their success. The proposed conversion option on IFC’s convertible loan would enhance the Group’s attractiveness in the event of the sale of shares to new investors while the B loan would be a means of introducing CTI to international capital providers. |
| Environmental and social issues - Category B |
| IFC’s ongoing supervision of the company’s shipping activities indicates that this new investment will not result in any material change in the management of environmental and social impacts and risks. Key environmental and social issues and mitigation are essentially the same as those described for the original investment, and CTI continues to demonstrate its ability to manage these appropriately. In particular, the company continues to comply with international maritime standards under SOLAS, MARPOL, the International Safety Management (ISM) code, and with IFC Performance Standards. The current Environmental and Social Risk Rating (ESRR) for the existing project is Excellent. |
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| For inquiries about the project, contact: |
This SPI contains a summary of IFC’s review prepared for the project. Additional information can be obtained directly from the following contact:
Mr. Nawras S. Anfoka
CFO,CTI Group
Amman Regional Office
PO Box 7676 Amman 11118 Jordan
Phone: +962 6 5685115
Fax: +962 6 5676939 |
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| For inquiries and comments about IFC, contact: |
General IFC Inquiries
IFC Corporate Relations
2121 Pennsylvania Avenue, NW
Washington DC 20433
Telephone: 202-473-3800
Fax: 202-974-4384
E Mail: Webmaster |
| Local access of project documentation |
Mr. Nawras S. Anfoka, CFO,
CTI Group
Amman Regional Office
Amman 11118
Jordan
Phone: +962 6 5685115
Fax: +962 6 5676939 |
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