Wednesday, Oct 27, 2010


 
   By Oliver Klaus 
   Of ZAWYA DOW JONES

MARRAKECH (Zawya Dow Jones)--Bahrain Mumtalakat Holding Co., the country's sovereign wealth fund, will use the expected $540 million in proceeds from the initial public offering of Aluminium Bahrain to boost its portfolio of liquid investments, Chief Executive Officer Talal Al Zain said Wednesday.

Mumtalakat, the biggest shareholder in Aluminium Bahrain, also known as Alba, is in the process of selling up to 163.3 million shares as part of an IPO that started Oct. 24 and will see the aluminum firm's shares listed on the Bahraini bourse and global depositary receipts representing the ordinary shares to be listed on the London Stock Exchange.

The government investment firm is expected to raise as much as $541 million from the IPO.

"We need to move more investments to more liquid investments to balance our portfolio," Al Zain told Zawya Dow Jones in an interview on the sidelines of the World Economic Forum on the Middle East and North Africa in the Moroccan city of Marrakech.

"So in the short term, our focus is really to direct liquidity into more liquid assets, alternatives such as hedge funds, fixed income--whenever it makes sense, equities, capital markets," he said.

"We look at our portfolio right now and it's very much concentrated from an asset class and from geography."

Al Zain said none of the funds raised from the Alba offering would be used to fund existing portfolio companies. Mumtalakat is the holding vehicle for a number of companies based in Bahrain, with assets also including Gulf Air, the Bahrain International Circuit and McLaren Group.

"All of the proceeds that we generate from either divesting--partial or full divestment--dividends we receive from our portfolio companies; all of them go to fund our new investment requirements," he said.

Mumtalakat targets an investment portfolio that is 50:50 balanced between the Middle East and North Africa region and the rest of the world, Al Zain added.

Alba operates one of the world's largest single site smelters.

Currently, the company's annual capacity to produce aluminum, a metal used in the automotive and construction industries, is 870,000 metric tons.

-By Oliver Klaus, Dow Jones Newswires; +9714 446-1693; Oliver.Klaus@dowjones.com

(END) Dow Jones Newswires

27-10-10 1550GMT