Wednesday, Oct 13, 2010
(Recasts. Adds details, background.)
DUBAI (Zawya Dow Jones)--In a sign of increasing confidence in the economic recovery underway in the United Arab Emirates, Axiom Telecom, a Dubai-based mobile phone distributor, said Wednesday it plans to sell up to 35% of the company in an initial public offering and will seek a Nasdaq Dubai exchange listing.
Axiom said the IPO, the first of its kind in the U.A.E. in over two years, will comprise a primary offering of new shares by Axiom Ltd. and an offering of existing shares by Axiom Ltd.'s current shareholders.
As it stands, Axiom is 53% owned by Al Bannai Investment LLC, 40% owned by a subsidiary of TECOM, a division of Dubai Holding, and 7% owned by Al Zarouni Enterprises LLC.
The price of the Axiom securities will be denominated in U.S. dollars and the sale price established through a book-building process, Axiom said.
Deutsche Bank AG is acting as sole global coordinator for the IPO, while Citigroup Global Markets and Shuaa Capital are joint bookrunners for the global offering.
"Net proceeds from the primary offering are intended to be used towards repaying a portion of Axiom Telecom's existing bank debt, as well as for other general corporate purposes," Axiom said.
Investor response to Axiom's IPO will be closely watched. On Tuesday, Oman's second telecom operator Omani Qatari Telecommunications Co., or Nawras, extended its initial public offering by a week. Sources familiar with that share sale said the deadline extensions was due to slack interest from retail investors.
The Nawras IPO was viewed by many as a key litmus test of investor appetite, especially retail, for new share issues in the region.
The total value of IPOs in the first six months of this year was steady at $1.2 billion--although 57% of the capital raised in the Mena region originated in Saudi. The value of IPOs in 2009 plunged 83.7% year-on-year to just above $2 billion, according to Zawya.com data.
Axiom's Chief Executive Officer Faisal Al Bannai, speaking on a conference call with reporters, said he wasn't worried that his company's share sale could strike the same retail demand issues as those experienced by Oman's Nawras.
"The U.A.E. is a totally different market than Oman and it all depends on how we offer our shares to customers. We have no concerns," he said.
According to company data for the first half of 2010, Axiom distributed about 67%--by value--of all the mobile handsets sold in the U.A.E. and around 16% of all mobile handsets sold in the Saudi Arabia.
The company generated revenues of 5 billion U.A.E. dirhams ($1.36 billion) in the year ended Dec. 31, 2009. First half 2010 revenues amounted to AED3 billion, it said.
-By Tim Falconer, Dow Jones Newswires; +9714 446-1690; tim.falconer@dowjones.com
Copyright (c) 2010 Dow Jones & Co.
(END) Dow Jones Newswires
13-10-10 0940GMT
