Iraqi operators Asiacell, Korek Telecom and Zain are facing a mandatory deadline for an initial public offering of stock, with reports stating that the companies have to sell-off a 25 percent holding on the local stock exchange within four years of acquiring their licences, according to Mobile Business Briefing.
This means that the companies must move toward a listing by the end of August 2011. According to Reuters, Asiacell, a Qtel affiliate, has expressed concerns about the timings, stating that it is worried that low liquidity on the bourse could stop it from raising enough cash. It notes that “the timing of an IPO may depend on clarifications on how to implement the requirements of the license, the stock market rules and Iraqi company law.”
Dow Jones Newswires said that an executive at Korek Telecom has stated that the company will “commit to the licence condition” that a stake has to be offered on the local market, and that its plans are “ready and maturing.”
As we reported last week, Zain is working towards a listing and says it will meet its commitments under the licence agreement. In addition to Reuters stating that the Iraq Stock Exchange has a market capitalisation of less than US$4 billion, with daily turnover averaging just US$1.6 million during May 2011, an unnamed analyst told Dow Jones that three telco IPOs in three months is “ambitious and aggressive.” The timings also mean the listings will coincide with summer and Ramadan, which may affect progress.
(Source: Mobile Business Briefing)