The Omani Qatari Telecommunications Company (Nawras) today announced the share price range of its IPO slated to close October 14.
Nawras is offering 40% of its shares on the Muscat Securities Market, to comply with the terms of its licence as set out by…
The Omani Qatari Telecommunications Company (Nawras) today announced the share price range of its IPO slated to close October 14.
Nawras is offering 40% of its shares on the Muscat Securities Market, to comply with the terms of its licence as set out by the Omani telecoms regulator. Nawras will be listed on the MSM on October 27.
The shares will be priced at 702 baisa to 902 baisa, valuing the company at OR456m to OR586m (US$1.2bn – US$1.5bn) with the final share price being determined by a book-building process.
Ross Cormack, CEO, told Telecomfinance: “This is the first time a bookbuilding exercise has been held for an IPO on the MSM and will allow us to test the market’s appetite and come to a fair price for both the buyers and the sellers of the shares.”
The IPO will open on September 15 and be available to two classes of investors with a price range of 702 to 902 baisa per share. Category I investors will subscribe at a price of 902 baisa and be allowed to apply for between 500 and 500,000 shares in multiples of 100. Seventy percent of the offer is open to Category I shareholders, who Cormack expects will come from the retail market. If the price set through the bookbuild is below 902 baisa, refunds will be made to this class of investor. Although the offer is open to retail shareholders of any nationality the shares must be purchased in Oman and the shareholder will need a local bank account.
The remaining 30% of the offer will be available for Category II shareholders, who can bid for between 500,001 to 26,037,700 shares, or up to 10% of the offer. Category II shareholders will participate in the book-building process and all investors will be allocated shares at the final share price, which may be lower than the subscription pricing for Category I investors.
Category II investors are to be institutional investors, which would include pension funds and fund mangers in Europe and North America.
Cormack said: “We asked the bookrunners to talk to people who were already investing in the telecoms sector, as well as investors in the region and internationally. They have a long list of possible subscribers including a number of emerging markets funds based in Frankfurt and London. They also have hedge fund clients.”
He continued: “Regional Sovereign Wealth Funds are not specifically interested in this IPO, however they could be the investors behind the buyers.”
The IPO is expected to raise between OR182m and OR234m (US$470m to US$604m) and is the first IPO in Oman since July 2008. Although the markets remain depressed, Cormack believes that the process will be a success. He said: “We are getting a lot of attention from the capital markets at the moment, as we are the only show in town. One of our advisors said that when they approached their own sales force they garnered 100% of the attention, which is unprecedented.”
The process is just a trade between current shareholders, including QTel, Tele-Denmark Communications, a Danish telecom operator and local Omani partners including the Ministry of Defence Pension Fund, Royal Office Pension Fund, Diwan of Royal Court Pension Fund, Internal Security Service Pension Fund and Sultan’s Special Force Pension Fund and new investors. The IPO is not a fund-raising exercise and will not lead to any more capital injection.
Cormack said: “We have an aggressive growth plan, which includes investing in Oman’s fixed line business, and all of this will be paid for by our own existing cash reserves, so we are not looking for any more money.”
Morgan Stanley and Bank Muscat are advising Nawras on the IPO. Neither QTel or Tele-Denmark were availaible for comment at the time of going to press
