Iraq’s three mobile operators are unlikely to conduct initial public offerings until the middle of next year and will not be penalised for missing an August 2011 deadline, the country’s regulator said on Thursday, according to a report from Reuters.
Under the terms of the 15-year, $1.25-billion, operating licences they secured in 2007, Korek, Zain and Asiacell were supposed to sell 25 percent of their shares via an IPO by the end of August, but all three had missed the deadline saying the fledgling Iraqi bourse was ill prepared for these listings.
“To put these shares in the market, it takes time,” Ahmed Alomary, Commissioner of Iraq’s Communications and Media Commission, told reporters on the sidelines of a conference in Dubai.
Iraq’s bourse has a market capitalisation of around $4 billion, and average daily trading in May was less than $2 million, prompting analysts to question whether the market is ready for the telecoms IPOs.
The three operators must first change from private companies to shareholding companies, a process that takes at least a month.
“One of the operators has provided a timeframe for the whole transition – it will be 260 (working) days,” said Alomary, without naming the firm.
According to its chief executive, Korek Telecom is unlikely to launch an initial public offering this year.
Iraq is sticking with plans to auction a fourth mobile licence by the end of 2011, Communications Minister Mohammed Allawi told Reuters on Thursday.