Axiom Telecom pulls IPO plans

The first initial public offering in the UAE in nearly two years has been cancelled, as the company set to go public — mobile phone retailer Axiom Telecom — reconsidered its options.

Axiom was set to offer institutional investors about US$100 million in shares, although the size of the issue had steadily fallen from more optimistic plans announced earlier in the year. The company had originally looked to IPO up to 35 per cent of the stock.

Axiom was set to list its shares on the Nasdaq Dubai before the end of the year with an offering that was expected to give it a market valuation of US$1 billion.

“While there were sufficient orders to fully cover the I.P.O. book at the price range, primarily due to demand from high quality international investors in Europe and the US, there were widespread concerns about market conditions and liquidity,” the company said in a statement. “The board has therefore decided to withdraw the offer at this juncture to protect current and future shareholders of Axiom.”

Faisal Al Bannai, founder and head of the company, which is controlled by the Al Bannai family, called the decision a difficult one, but insisted on Axiom’s “suitability as a public company” and said he would be “re-evaluating our options in the future.”

The range of the offering was set between US$0.80 and US$1.15, with most subscribers near the top of the range, according to the company.

Axiom planned to use the funds to pay down debt.

A subsidiary of Dubai Holding owns 40 percent of Axiom, with another seven per cent of the company belonging to Al Zarouni Enterprises.