Zain to raise up to $5bn in Europe listing

FUND RAISING: Zain plans to raise up to $5 billion in a stock offering in Europe next year, Al-Barrak said. (Getty Images)

Kuwait-based telecom Zain 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 (IPO) 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) or NYSE Euronext.

"It will be between $4-5 billion," Barrak told newswire Reuters in an interview at the World Economic Forum (WEF). 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.

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 Company (STC) 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 owns some 6% in Zain Bahrain.

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

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

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