UPDATE 1-Grameenphone chops IPO to $125 mln amid global crisis

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By Ruma Paul

DHAKA, Nov 11 (Reuters) - Bangladesh's top mobile operator Grameenphone, 62 percent owned by Norway's Telenor (TEL.OL), said on Tuesday it more than halved a planned share sale to $125 million because of the sharp downturn in global markets.

Grameenphone said it aimed to raise up to $50 million from a pre-IPO share placement, and another $75 million from the initial public offer itself.

The company had originally planned to raise $300 million in what would have been the country's biggest IPO. [ID:nLT247092]

The Dhaka bourse has a market value of $13.85 billion and has seen just a handful of IPOs larger than $10 million, according to Thomson Reuters data.

Grameenphone refiled a formal IPO application to list its stock on the Dhaka bourse on Tuesday, it said. Listing depends on regulatory approvals and market condition.

"However the final size will depend on the demand coming from the investors and also the result of ongoing dialogue with (Bangladesh) government on the eligibility of the tax incentive," it said.

Grameenphone was founded in 1996 by Norwegian telecoms group Telenor, the second-largest foreign operator in Asia, and Grameen Telecom, which was launched by microfinance pioneer and Nobel Prize winner Muhammad Yunus.

DISPUTE OVER CONTROL

Telenor and Yunus have been embroiled in a dispute over control of Grameenphone, but Grameenphone reiterated that the shareholders remained committed to the IPO and to develop Grameenphone's success.

"The shareholders of Grameenphone remain committed to the IPO, to develop the Bangladesh capital market and to share Grameenphone's success with its future shareholders," Oddvar Hesjedal, chief executive of the company, told a news conference.

Bangladesh's mobile sector has grown rapidly, with subscriber numbers reaching more than 45 million at end-September from 200,000 in 2001, helped by competitive tariffs, cheap handsets and a steady economic growth.

Analysts predict the number of subscribers could top 70 million by 2011, nearly half the country's population of more than 140 million.

At end-September, Grameenphone had 20.82 million subscribers, around 46 percent of the national total -- ahead of Egyptian Orascom Telecom's (ORTE.CA) Banglalink and Telekom Malaysia's (TLMM.KL) Aktel.

Other operators are CityCell, a joint venture between Pacific Bangladesh Telecom and Singapore Telecommunications (STEL.SI), Gulf-based Warid Telecom and state-run Teletalk.

Although nearly half of Bangladesh's population is still below the poverty line, the country has been one of the world's fastest growing cellular markets. (Editing by Anis Ahmed and Hans Peters)