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Sun 31 Jan 2010 09:00 PM

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Mazaya IPO launched in tough conditions - CEO

Real estate developer hoped to raise $137.4m in IPO running from Jan 17 - 31.

The initial public offering of real estate developer Mazaya Qatar is undersubscribed because of weak investor appetite and a sagging regional property market and may be extended, the company said.

Mazaya, an affiliate of Kuwaiti real estate developer Al Mazaya Holding, hoped to raise $137.4 million in the IPO which was slated to close on Sunday.

Speaking from Doha, Seraj Al Baker, ceo, said: "Some institutions have asked for a postponement."

He added: "I lie if I tell you it was oversubscribed. That is not the case."

Sharia compliant Mazaya plans to list on Qatar's stock exchange within a month, said Al Baker, noting a successful IPO would be one that is "three, four, five times subscription."

He added: "But no-one expects that in this environment."

Mazaya had planned to kick off an IPO in 2008 but it was postponed because of the global financial crisis and economic slowdown.

Al Baker said: "Vodafone was ahead of us in the queue, and then the crash happened."

British phone group Vodafone's Qatari unit raised $928.6 million in an April IPO.

Mazaya has said it wants to benefit from a property shortage in Qatar, the world's largest exporter of liquefied natural gas.

Al Baker said: "I think the timing is right, Qatar is an oasis where everything is a little different. They are looking for long term stability, investing in education, research, sport. They have the money to pump into that, and they can do it."

The company has signed an MOU with the Qatar Foundation, a non profit organization, to build part of a convention centre. The foundation also plans to build 6,000 units of accommodation for students in the Qatari capital, he said.

The IPO, which is open to citizens and 100 percent owned Qatari firms, ran Jan. 17 to Jan 31. The firm will offer 50 million shares, or 50 percent of its capital, with Qatar National Bank (QNBK.QA) as the lead manager.

Nominal value will be $2.7 per share.

Kuwait's Al Mazaya Holding owns a 10 percent stake in Mazaya Qatar. (Reuters)

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