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Tue 30 Dec 2008 12:56 AM

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Saudi Atheeb telco plans $80mn IPO in January

The Batelco-affliliated company will be the Kingdom's first initial offering since August.

Etihad Atheeb Telecommunications Co, one of three firms licensed to operate new fixed-line networks in Saudi Arabia, plans to raise 300 million riyals ($80 million) in an initial public offering next month.

Atheeb, which comprises Bahrain Telecommunications Co (Batelco) and private Saudi investors, plans to sell 30 million shares, or 30 percent of its capital, at 10 riyals each, the Capital Market Authority (CMA) said on Monday.

The IPO will run from Jan. 24 to Feb. 2.

This will be Saudi Arabia's first IPO since August. The local bourse has lost about 45 percent of its value since the last listing and many analysts say CMA has deliberately put on hold IPOs pending an improvement of investor sentiment.

Etihad Atheeb will face competition from fixed-line monopoly Saudi Telecom (STC) and two other firms that won licences last year to offer fixed-line services.

The two other firms are Optical Communications Co, led by US Verizon Communications Inc and Al-Mutakamilah Company which is led by Hong Kong's PCCW.

STC has about 4.5 million fixed-line subscribers and around 1.3 million internet users. Saudi Arabia has a population of 24 million.

Etihad Atheeb plans to invest $1 billion in its Saudi fixed-line operation in the first five years of business, its Chairman Prince Abdul-Aziz bin Ahmed Al-Saud said in February.

Etihad Atheeb would target government and industrial hubs and regions covered insufficiently by STC, he said.

The firm was initially planning to sell 25 percent of its capital to the public and an additional 10 percent stake to the General Organisation for Social Insurance (GOSI) and the Public Pension Agency, Saudi Arabia two largest state pension funds.

After the IPO, Batelco would keep a 15 percent stake in Atheeb, Atheeb Group will hold 30 percent, private Nahla Company will have 14 percent and GOSI will have a 5 percent stake, a spokesperson for Etihad Atheeb said. (Reuters)

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