Zain Bahrain IPO process to kick off September 2

Zain will launch its initial public offering (IPO) of its Bahraini unit next month, in what would be the first listing on the Kingdom’s bourse since 2010.

The subscription period for the IPO will run from September 2 to September 16, with shares priced at 0.19 dinars (US$0.50) each, Zain said in a stock market filing in Kuwait, adding the offering was open to retail investors in Bahrain as well as institutional investors in the Gulf region.

Nearly all the cash raised from the offering of 15 per cent of the firm – equivalent to 48 million shares – will be used to fund upgrades of its network infrastructure as well as expand its 4G LTE offering in the Kingdom.

The investment banking units of Gulf International Bank and National Bank of Kuwait will run the offering, with the former also acting as underwriter.

An IPO had originally been mooted in 2008 but the global financial crisis pushed the plans back until Bahrain’s Telecommunication Regulatory Authority (TRA) instructed Zain last April to complete the sale by the end of 2013.

While this deadline passed, moves began earlier this year to move forward with the floatation.

In May this year, Zain Group confirmed it had increased its stake in its operation in Bahrain to 63 per cent, having acquired an additional 6.25 per cent shareholding from minority shareholders that include Vodafone Group, for a total consideration of U$12.5 million. This valued Zain Bahrain at US$200 million.

At the time Zain Group explained that Zain Bahrain was undoing a process to list 15 per cent of its shareholding on the Bahrain Bourse and the transaction would permit Zain Group to retain majority control of the Bahrain unit upon completion of the stock market listing.