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Zain Bahrain to offer 48m shares in IPO

Manama, August 4, 2014

Zain Bahrain, the kingdom’s second licensed full service telecom operator, is set to offer 48 million shares equivalent to 15 per cent of issued share capital.

Bahrins’s first initial public offering (IPO) since 2010 will be issued at a price of 190 fils ($0.50) starting September 2, said a report in the Gulf Daily News (GDN), our sister publication.

The offering closes on September 16 and the results of subscription and allotment basis will be announced on September 18.

The IPO is open to Bahraini institutional and retail investors as well as GCC institutional investors.

The current issued share capital of Zain Bahrain is BD32 million ($84.3 million) divided into 32 million shares of BD1 each.

After its conversion into a public joint stock company, the fully paid share capital will be BD36.8 million divided into 368 million shares with face value of 100 fils.

The offering price, therefore, represents a premium of 90 fils per share, that is, 90 per cent of face value.

Based on the IPO price, the company is valued at $161.2 million (BD60.8 million).

Zain Bahrain said the proceeds amounting to BD9.12 million will primarily (95 to 98 per cent) be used to fund capital expenditure (capex).

The capex is aimed at upgrading network infrastructure to improve indoor coverage, expanding capacity to meet high bandwidth demands and introducing smart features for smartphones.

It will also include expanding the current 4G LTE service for achieving speeds of up to 100Mbps and subsequently to 150 Mbps and for deploying a fibre-optic network nationwide.

Subsequent to the IPO, the company expects to list on the Bahrain Bourse, under the symbol ZAINBH, for which an application has been submitted to the stock exchange and the Central Bank of Bahrain.

Under the terms of a licence granted in 2003, Zain Bahrain, 56.3 per cent owned by Kuwait's Zain Group, was required to sell 15 per cent of its shares in an IPO and list on the Bahrain Bourse, after five years.

Initially planned in 2008, the IPO was suspended then.
Minority shareholders include chairman Shaikh Ahmed bin Ali Abdulla Al Khalifa (16.3 per cent), Vodafone Group (6.1 per cent) and a government pension fund (4.7 per cent).

Other members of the board are deputy chairman Asaad Ahmed Al Banwan, Shaikh Rashid Abdulrahman, Waleed Al Roudan, Jamal Shaker Al Kazemi and Shaikh Khalid Al Bahar.

It is unclear whether Zain Group's ownership stake will be reduced below 50 per cent via the IPO, which would result from shareholders selling shares on a proportional basis.

Analysts have predicted a strong response from investors.

They said Bahrain's relatively high GDP per capita and rising public sector wages, which are driving private consumption growth, makes the market suitable for high-value services, especially advanced mobile data services.

Bahrain's Gulf International Bank and Watani Investment Company (NBK Capital), the investment banking arm of National Bank of Kuwait, are the joint lead managers, financial advisers and book runners. A prospectus detailing the terms and rights attached to the share offering was published in the local media yesterday. - TradeArabia News Service

Tags: IPO | Bahrain | Shares | Zain |

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