The majority owner of MENA-focused pay-TV provider OSN plans to launch an initial public offering process for the group “within a few weeks”.
Faisal al-Ayyar, deputy chairman of Kuwait Projects Co (KIPCO), which has a 60.5% stake, told reporters…
The majority owner of MENA-focused pay-TV provider OSN plans to launch an initial public offering process for the group “within a few weeks”.
Faisal al-Ayyar, deputy chairman of Kuwait Projects Co (KIPCO), which has a 60.5% stake, told reporters yesterday that “all things are tilting towards London” for the listing.
A spokesman for KIPCO, one of Kuwait’s biggest listed investment companies, confirmed the comments but declined to add details.
Private Saudi investment firm Mawarid Group holds the rest of OSN, and the owners previously announced in June that they had hired Rothschild to consider an IPO.
However, OSN CFO Olivier Sage was later cited telling Bloomberg in November that those plans had been scrapped, and it was instead focusing on growing its subscriber base. At the time local brokerage Arqaam Capital valued OSN at US$4.3bn.
Since then Dubai-based OSN’s focus on exclusive content and bundling deals has continued to drive revenue growth in the fast-growing MENA region.
Al-Ayyar, who is also OSN’s chairman, told KIPCO’s annual investment forum yesterday that the pay-TV firm’s revenue is set to double over the next three years, after soaring 29% in 2013 to around KD139.5m (US$494.4m). OSN posted KD10.44m (US$37m) in profit for 2013, compared with a KD3.41m (US$12m) loss the year before.
“The very positive performance trends in all our core sectors – including banking, media, real estate and insurance – were evident in the growth and profitability of our companies during 2013,” said Al-Ayyar.
“In particular, our broadcast company, OSN, continued to deliver strong improvement in revenue and profit, and subscriber numbers are now close to the one million mark. We believe that all signs point to an economic recovery that will allow KIPCO to continue its growth trend in the coming years.”
Subscriber growth behind rethink
OSN grew its subscriber base by 32.3% last year while revenues from household subscriptions increased to €301m (US$415.2m), representing 54% of all satellite pay-TV revenues in the MENA region according to IHS analyst Constantinos Papavassilopoulos.
IHS forecasts OSN’s subscriber base will be around 1.7 million by 2018, helped by its recent acquisition of South Asia’s Pehla Media & Entertainment, which added around 100,000 subscribers in the last quarter of 2013.
The majority of OSN’s business is in the Middle East, where satellite remains the primary method of reception for pay-TV services and represents 74% of households. IHS figures show the pay-TV market in the region as a whole has grown four-fold over the past ten years to reach 4.3 million households.
Most of OSN’s customers are in the Gulf States with 55%-60% of them in either the UAE or Saudi Arabia.
The company, which was formed in 2009 through the merger of Showtime Arabia and Orbit Communications, uses Nilesat 102/201 and Eutelsat 7 West A satellites.
It secured its first independent financing facility late last year when it arranged a US$200m five-year loan with Mashreq as sole mandated lead arranger, bookrunner and underwriter. Barclays, BNP Paribas, Citibank, HSBC and National Bank of Kuwait comprised the lending syndicate.
Papavassilopoulos said OSN’s search for further subscriber growth will likely target Francophone North African countries such as Tunisia, Algeria and Morocco. The group is reportedly in talks with French broadcasters to enrich its content offer across the Maghreb region.
He added that, if OSN’s listing goes ahead, it will only be the second IPO of a media company in MENA – after Saudi Research and Marketing Group SRMG in 2006 – because of the challenge these companies have to turn a profit in the region.
