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Tue 4 Nov 2008 06:23 AM

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Bahrain central bank blocks Naseej IPO plan

Shareholders told to postpone Nov 18 offering 'due to current market conditions'.

Bahrain-based real estate and construction company Naseej has postponed plans for an initial public offering (IPO) on the instructions of the Central Bank of Bahrain (CBB).

The instructions, made less than three weeks before the planned November 18 IPO launch date, were “due to current market conditions”.

And the u-turn comes just days after the company founders announced that the the IPO, designed to raise 100 million dinars ($265.3 million) for the new developer, would go ahead despite the global financial crisis.

Two weeks ago, Khalid Abdulla-Janahi, chairman of Ithmaar Bank, a Bahrain-based Islamic lender which led the founders, said: "Our business model has not changed [since the crisis started]. Either you do it now or you forget about it."

Abdulla-Janahi said Naseej plans to invest two billion dinars over the next three years and the IPO would have been the largest to be launched from Bahrain.

On Tuesday, Janahi said: “Following the announcement, we received significant interest both from institutional and individual investors in the IPO and about 70 million dinars was set to be injected by regional investors into Bahrain’s financial system.

“Despite the anticipated success of the IPO, the Naseej shareholders have chosen to recognise and respect the wisdom of the CBB’s decision."

He added: “The shareholders however... have decided, in the meanwhile and as a transitional phase, to nonetheless establish the company. The IPO, including issue fees, will be announced when that option becomes available."

Janahi said he did not expect an extended delay between the establishment of Naseej and the IPO announcement because, he said, the fundamentals of Bahrain’s financial systems were solid.

“We have invested extensive research on these IPO plans and a lot of people have put in a lot of hard work,” said Janahi.

Naseej will manage the entire spectrum of the construction and real estate business, from the initial planning stages, to manufacture of building materials, design, project management, and marketing advisory services for developments as well as building, construction and facility management.

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