Vodafone Qatar to commence IPO on April 12

UPDATE 2: The telecoms company is looking to sell a 40% stake in the IPO.

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By  Reuters Published  March 15, 2009

The Qatari unit of Vodafone Group will launch on April 12 the first initial public offering (IPO) in more than a year after the bourse regulator froze issues amid worsening local and global markets conditions.

The Qatari unit of Vodafone Group aims to raise 3.38 billion Qatari riyals ($928.6 million) in its planned public offering and list its shares on the Doha bourse by June, the unit's finance chief said on Sunday.

The unit will target a market share of 33 percent in three years and will spend $200 million on hardware this year alone, having contracted France's Alcatel-Lucent in September to build its network, Chief Financial Officer John Tombleson told Reuters in an interview.

"It (the IPO market) has obviously gotten a lot scrutiny from us, but we believe there will be strong demand," he said.

The group, which has broken the monopoly of state-controlled Qatar Telecommunications Co, will sell a 40 percent stake in the IPO which runs until April 26.

"This is a significant IPO as it will become one of the largest IPOs in Qatar," Vodafone Qatar Chairman Sheikh Abdulrahman Saoud Al Thani said in a statement earlier.

The statement did not give details of the amount to be raised through the sale.

Vodafone had planned to sell the stake in the operator in October, but did not receive the required approvals from the Qatar Financial Markets Authority (QFMA) due to difficult market conditions.

Appetite for IPOs, once a favoured tool to raise capital in the Gulf, slumped in the second half of 2008 as investors reacted to the worst global economic crisis since the Great Depression.

"Theoretically, it is a good investment and there is potential for (the new operator) to get market share, but the problem is the institutions," said Samer al-Jaouni, general manager at Middle East Financial Brokerage.

"Will they be able to finance such an IPO? We may not see as much interest as in the past due to financing restrictions (investors are facing)."

Gulf International Services, which owns some transport, insurance and drilling services operations, was the last firm to float in March 2008 with investors offering 8.9 billion riyals ($2.4bn) for shares in the company.

Investors in the Gulf Arab region are facing a liquidity shortage and stock markets in the world's biggest oil-exporting region have tracked global bourses downward.

Vodafone, which won the bid for Qatar's second mobile telephone licence for $2.12bn in December 2007, also intends to sell a 15 percent stake in the business to local institutional investors, leaving it and local partner Qatar Foundation with 45 percent.

It started operations on March 1.

HSBC Holding plc and Qatar National Bank are advising on the sale, one of the first in the Gulf Arab region this year.

Gulf firms raised $4 billion in initial public offerings in the first quarter of 2008 and could raise $20 billion more through the end of 2010, Abu Dhabi-based Gulf Capital private equity firm said last year.

Officials at Vodafone Qatar were not immediately available for comment. ($1=3.641 Qatar Rial). (Reuters)

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