UPDATE 2-Kuwait's Zain to raise up to $5 bln in Europe offer

(Adds details on Bahrain IPO, background)

By James Cordahi

SHARM EL-SHEIKH, Egypt, May 19 (Reuters) - Kuwait-based Mobile Telecommunications Co (Zain) (ZAIN.KW) may sell shares worth up to $5 billion in a stock offering in Europe next year, its chief executive said on Monday.

Kuwait's biggest mobile operator, which has been rapidly expanding abroad, also said it was on track for an initial public offering in Gulf neighbour Bahrain in June. Saad al-Barrak said Zain could make a share offer in the first or second quarter of 2009 on a European stock exchange such as the London Stock Exchange (LSE.L) or NYSE Euronext (NYX.PA) (NYX.N).

"It will be between 4 and 5 billion dollars," Barrak told Reuters in an interview at the World Economic Forum. Zain had previously put the value of the offer at around $4 billion.

He said Zain, which is currently listed only in Kuwait, may sell a part of the whole company or its international operations unit.

"We don't need the money, we want to use the shares as currency," he said of the share offering, declining further comment.

BAHRAIN OFFER

Zain has been expanding in the Middle East and Africa through acquisitions and winning licences as it is facing more competition at home, where Saudi Telecom Co 7010.SE is to set up the third mobile phone company later in 2008.

Zain bought Netherlands-based Celtel for $3.4 billion in 2005 to enter sub-Saharan markets.

As part of its planned Manama listing, Zain is also in talks with existing shareholders to sell some of their stakes, said Ibrahim Adel, corporate communications director. Apart from local investors, Britain's Vodafone (VOD.L) owns some 6 percent in Zain Bahrain.

Adel said Zain wanted to list between 15 and 20 percent of its Bahrain operations, while the parent firm wanted to keep its 57 percent stake.

"It's a profitable company and our technological incubator," he said, declining to give a valuation for the listing.

Zain also decided last year to set up the headquarters for its international operations unit in Bahrain.

He said Zain wanted to talk to Bahraini authorities to waive a rule under which it had to list 40 percent of its shares.

It had appointed NBK Capital (NBKK.KW) and Bahrain-based SICO Investment Bank to manage the deal, Adel said.

(Writing by Ulf Laessing; Editing by Rory Channing)