DUBAI/MUSCAT: Omani firm Nawras, a unit of Qatar Telecommunications, could raise as much as $608 million in its 40 percent initial public offering (IPO) after setting a price range of 702-902 baisas per share.
Nawras, which broke the monopoly of state-controlled Omantel in 2006, is offering 260 million shares in Oman’s first IPO in two years.
"This process is about trying to sort out a fair price for buyers and sellers, and we’d like a wide range of new shareholders," chief executive Ross Cormack, said in an interview.
If the offer is fully subscribed, Nawras would raise 182 million rials ($472.7 million) at the lower end of the range and about 234 million rials ($607.8 million) at the higher end.
All founding shareholders of the company, including majority shareholder Qtel, are expected to offload stakes on a pro-rata basis.
"Qtel was a majority shareholder before and will remain a majority shareholder after the share issue," Cormack said.
The final price will be determined on Oct. 24 and shares will be listed on the Muscat bourse on Oct. 27.
Nawras’s revenues for 2010 are projected to be 190 million rials with net income coming in at 53 million rials, a research report on the company showed.
Flexibility
Nawras plans to price the offering through a book building process for institutional investors. One analyst said he expects the IPO to be oversubscribed.
"Nawras has started a precedent that all the future IPOs in Oman will follow. I see the Nawras IPO oversubscribed at least 50 percent because of the flexibility of price," Mohammed Kiyumi, analyst at Muscat Capital Investment said.
Retail investors will initially subscribe at the higher end of the range, Nawras said in a statement on Tuesday.
As much as 70 percent of the offering is open to individual investors with the remainder available to institutions.
Morgan Stanley, BankMuscat and QNB Capital are lead managers of the sale, while BankMuscat is the sole issue manager.
According to the Capital Market Authority (CMA), the Sultanate’s regulator, companies setting IPOs in Oman need to float at least 40 percent of their shares.
Gulf IPO activity nearly came to a halt in 2009 as a result of the financial crisis with the total value of IPOs in the Middle East and North Africa falling 83 percent, according to a report by consultancy Ernst & Young.
Activity has been muted in 2010 too with most Gulf States, except Saudi Arabia, seeing no public offerings this year.
