(Recasts, adds spokesman comment, detail)
By Matt Smith
DUBAI, June 4 The Iraqi unit of Kuwaiti telecoms
company Zain launched subscriptions for a long-delayed
public share offering on Tuesday, fulfilling a pledge made in
2007 when it secured a licence to operate in the war-scarred
Iraq's biggest mobile phone service provider, like its two
smaller rivals, agreed to float a quarter of its stock and list
on the Iraq Stock Exchange (ISX) under the terms of the $1.25
Iraq is in dire need of better infrastructure but its
unstable politics and persistent sectarian violence have
dampened investor appetite and all three companies missed an
August 2011 deadline for an initial public share offering.
The local stock market is still tiny. When one of the three
telecom companies, the local unit of Qatari telecoms group
Ooredoo, finally listed on the ISX in February, it
roughly doubled the size of the entire market.
The $1.27 billion sale of the Ooredoo unit, Asiacell, was
the first major share issue in Iraq since the U.S.-led invasion
that toppled Saddam Hussein in 2003 and was Iraq's largest ever
Zain Iraq could be even bigger and there are questions over
whether the ISX has the scale and sophistication to cope with
the additional volume expected to pass through its trading
In 2011, Nomura estimated Zain Iraq's enterprise value - the
value of its equity and debt combined - at $4.9 billion,
compared to $4.4 billion for Asiacell.
Zain will set up a joint stock company, Al-Khatem, to house
its Iraqi operations and must offer 55.9 million shares to the
public at 1 dinar each. The offer period runs for 30 days, Zain
said in a statement to the Kuwaiti bourse.
Zain Iraq made a net profit of $369 million last year on
revenue of $1.73 billion.
"Zain Iraq is currently an offshore company. We are taking
it onshore by creating this joint stock company to be able to
list on the Iraqi bourse," a Zain spokesman said.
Zain Iraq had half of Iraq's mobile subscribers in 2012,
according to Zain's earnings statement, with Asiacell and France
Telecom affiliate Korek claiming 36 and 14 percent
($1 = 1164.2750 Iraqi dinars)
(Additional reporting by Mirna Sleiman; editing by Tom