Beirut (APD) - Saudi Arabia's startup broadband internet provider, ElectroNet, announced that it will convert into a closed joint stock company with a capital of over SR 1 billion in order to offer its shares in an IPO, the Riyadh-based al Iqtisadiya daily reported Friday.
"We will submit a letter of intent (LOI) in early July to the Saudi ministry of commerce and industry that includes all legal documents required for the establishment of the company as a closed joint stock firm," said the chairman of ElectroNet, Raed Khusheim.
He is also chairman of Khusheim Company, a Saudi distributor of electrical equipment, which participated in the founding of ElectroNet together with Dallah Al Baraka Group, Ahmed Saleh Kaki Sons Company, and other Saudi investors.
ElectroNet recently publicized its plan to develop a Broadband over Power Line (BPL) infrastructure in Saudi Arabia, which would allow consumers to link to the internet via a high bandwidth connection from electric sockets.
Khusheim said that the company will offer more than 100 million shares at SR 10 per share but he did not state what percentages of the total capital would be available to investors and what stake the company plans to offer later on in an IPO.
An inaugural shareholders assembly for the launch of the company would be held in June in Riyadh, he added.
In Saudi Arabia, the company would compete with providers of dial-up and digital subscriber line (DSL) internet access, which are both phone-based, and with service providers that offer satellite-based access.
According to ElectroNet's website, the company is also seeking to develop networks in other countries of the region, including Egypt, Jordan, Lebanon, and Syria.
According to Khusheim, two international communication companies, one from Italy and the other from Japan, are interested to be strategic partners in ElectroNet and each made offers for obtaining a 20% stake in the Saudi company.
"We aim to acquire a fixed line operating license in the Kingdom which the government stated that it will offer by the third quarter of 2006," he concluded. [TS]
By Nadim Issa, APD Staff Writer in Beirut
© APD (Arab Press Digest) 2006
