Nawras plans to offer 260m shares via IPO

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MUSCAT: NawrasNawras, the Sultanate's second biggest telecom service provider, is planning to offer 260 million shares through an initial public offering (IPO) by next month.

Although the company and its lead managers are tight-lipped on the issue size and offer price, market insiders indicated that the price range may be 700-900 baisas, which include a premium of 600-800 baisas per share for a 100 baisa-share.

This comes to roughly 9 to 12 multiples of the company's annualised earnings per share (EPS) for the current year.

The share offer is open for both domestic and foreign investors.

The premier telecom firm, which broke the monopoly of majority state-owned Oman Telecommunications Company in 2006, is planning to reveal full details of its share offer to the media on September 1.

Market insiders speculate that the issue may open either by early second week or third week of September.

Profit
The total size of the issue is expected in the range of RO182-234 million, in view of the fact that the price band is 700-900 baisas and the size of the issue is 260 million shares.

As much as 60 to 70 per cent of the issue is reserved for individual investors, who apply for less than 10,000 shares.

And the remaining shares are for institutional investors, including pension funds.

Market sources said that NawrasNawras, a joint venture of Qtel and few Omani investors, has achieved a net profit of RO24 million for the first half, and therefore, the annualised EPS comes to 74 baisas. The company has a paid up capital of RO65 million, and the plan is to offer 40 per cent of the promoters' stake by way of an offer for sale, which is the regulatory requirement.

Paid-up capital
"The company is not enhancing its paid up capital," said a top-level official at the Capital Market Authority.

Market sources said that lead managers have started sending feelers among potential investors to get their feedback on pricing.

NawrasNawras is planning to introduce the book-building process for determining the right price for the share offer for the first time on the Muscat Securities MarketMuscat Securities Market (MSMMSM).

Unlike the traditional fixed price method, a price band is offered by the issuer, within which institutional investors are allowed to bid and the final price is determined by the issuer only after the closure of bidding. BankMuscat is advising NawrasNawras for its initial public offering.

NawrasNawras will have to proceed with its book-building process like educating investors and conducting road shows ahead of opening the issue in September.

After the road shows, the company invites bids from institutional investors wherein the institutions bid for different quantities at different prices (ranging from 700 to 900 baisas).

However, retail investors will have to pay the highest price and in case the share is offered at a lower price, the difference will be refunded to the investor at the time of allotment.

CMA sources earlier said that NawrasNawras has submitted a draft prospectus, without mentioning the price range.

Meanwhile, NawrasNawras stated that preparations for the launch of its IPO and listing on the MSMMSM are going according to the plan agreed with the relevant public authorities.

New network
"While our team has been working tirelessly to roll out our new fibre-optics network, our international gateway, and our fixed-line voice and broadband services and to carry on delivering pleasingly different services to our customers, the preparations for our IPO have been continuing behind the scenes.

NawrasNawras has agreed on a detailed IPO plan with the public authorities," Ross Cormack, chief executive officer of NawrasNawras, said in a statement yesterday.

By A. E. James

© Times of Oman 2010