Bahrain's Mumtalakat seeks $540m in Alba IPO

SWF plans to sell up to 163 million ordinary shares in the company; fund seeks to diversify from local investments
Bahrain's Mumtalakat seeks $540m in Alba IPO
Mumtalakat is one of the smaller funds in the worlds top oil-exporting region, with $9.1bn in assets at the end of 2009.
By Reuters
Sun 17 Oct 2010 02:29 PM

Bahrain's sovereign
wealth fund Mumtalakat plans to raise as much as BD204m ($540m) in the initial
public offering (IPO) of Aluminium Bahrain (Alba), as it diversifies away from
local investments.

Mumtalakat's Chief Executive Talal Al Zain told a
press conference in Manama that the retail portion of the offering would be
priced at BD1.250 per share, while the price range for institutional investors
was 900 fils to BD1.250.

There are 1,000 fils to the dinar.

Mumtalakat plans to sell up to 163 million ordinary
shares in the company, which operates an aluminium smelter in Bahrain, or up to
11.47 percent of its holding.

The sovereign fund, which bundles Bahrain's non-oil
state-owned companies, is one of the smaller funds in the world's top oil-exporting
region, with $9.1bn in assets at the end of 2009.

It plans to sell some of its local private equity
holdings to diversify into more liquid and international assets.

"All proceeds will go to new investments,"
Al Zain said.

After a virtual two-year stand-still, the Gulf Arab
IPO market is returning to life, with the United Arab Emirates' retailer Axiom
Telecom also planning an IPO.

Alba posted a full-year net loss of $220.7m in 2009,
compared with a profit of $781.9m the year before, due to lower aluminium
prices, according to a Mumtalakat investor presentation from June.

The retail offering period for the IPO will start on
October 24 and end on November 4, with trading expected to start on December 5.
The retail tranche of the IPO of 25 percent will be underwritten by National
Bank of Bahrain, Bahrain Islamic Bank, Al Salam Bank and Gulf International
Bank.

The shares will be listed on the Bahrain Stock
Exchange, while global depositary receipts (GDR) will be listed in London.
Bookrunner and lead manager for the GDR listing are JP Morgan and GIB.

Mumtalakat owns a 77 percent stake in Alba, with
chemicals giant Saudi Basic Industries owning the rest.

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