* Zain Bahrain planned IPO in 2008, but sale was abandoned
* Unit's 9-mth profit to Sept. 30 fell by more than half
By Matt Smith
DUBAI, April 10 Telecom operator Zain's
Bahraini unit has received government approval to
launch a long-awaited initial public offering (IPO), the company
said on Wednesday.
Former Kuwaiti monopoly Zain did not provide further details
on the IPO, although a local Bahrain newspaper said the unit had
been ordered by the cabinet to float 15 percent of its shares.
Bahrain's second mobile licence was awarded to Zain in 2003
- ending Bahrain Telecommunications Co's (Batelco)
monopoly - and the unit had planned to launch an IPO in 2008,
only for the share sale to be abandoned.
Since then, Zain Bahrain's competitive position has
deteriorated following the 2010 launch of third mobile operator
Viva Bahrain, a subsidiary of Saudi Telecom Co, which
has slashed prices to woo customers.
Zain Bahrain's net profit for the nine months to Sept. 30
fell by more than half and its revenue fell 5 percent over the
same period, so now may be an inopportune time to float.
Zain holds a 56.3 percent stake in Zain Bahrain. Other
shareholders include Zain Bahrain's chairman, Sheikh Ahmed bin
Ali Abdulla al-Khalifa, who owns 16.3 percent, while Vodafone
and a government pension fund own 6.1 and 4.7 percent
respectively, according to research by Zawya, a Thomson Reuters
It is unclear whether existing shareholders will sell shares
in the IPO on a proportional basis, thereby taking Zain's stake
below 50 percent.
Zain Bahrain would likely list on Bahrain's bourse,
which has a combined market value of $16.3 billion.
Trading is thin, with daily volumes averaging 3.4 million
over the past year, according to Reuters data. This activity is
concentrated among a few stocks, with only five seeing more than
50,000 shares change hands on Wednesday.
"The cabinet decision is also a signal that the time is
right for an IPO and the market is ready," Zain Bahrain chairman
Sheikh Ahmed said in a statement issued by parent Zain.
The Telecommunications Regulatory Authority (TRA) was not
immediately available for comment.