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Axiom seeking $1 bln IPO via institutional offer

First initial public offering from the United Arab Emirates in nearly two years.

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November 22, 2010 8:17 by



UAE handset retailer Axiom Telecom said on Sunday it expects to debut on Nasdaq Dubai in early December with a market value of up to $1 billion after selling up to a third of its shares to institutional investors.

In what would be the first initial public offering from the United Arab Emirates in nearly two years, Axiom set the IPO share price range between $0.80 and $1.15 and told a press conference that the first day of trading would likely be on or around December 9.

When the retailer announced plans in October to list a 35 percent stake on Nasdaq Dubai, it was not yet decided what portion of the shares would be allocated to retail investors and how much would be reserved for institutional investors.

The company said, however, on Sunday the IPO was not available to retail investors.

“The IPO is only being directed at, and made available to, certain institutional investors,” Axiom said in a statement. “It is not being made available to the general public.”

But given broader interest, one broker said he expects retail investors to actively seek shares once they list.

“Retail investors want to diversify — many are sitting on cash and are sceptical about entering into real estate-related stocks, while the telecoms sector has done comparatively well, even through the financial crisis,” said Vyas Jayabhanu, head of investments at Al Dhafra Financial Broker.

The roadshow and bookbuilding process, which starts Sunday, is scheduled to conclude December 3, Axiom said.

The Gulf Arab IPO market has returned to life in recent weeks after a virtual two-year standstill, but sellers are not getting an easy ride.

Both Omani telecom operator Nawras and Aluminium Bahrain priced their recent IPOs at the lower end of the respective price ranges, and both drew subdued retail interest.

Net proceeds from the IPO will go towards financing Axiom’s future growth needs and reducing its reliance on existing borrowing lines, with $100 million of proceeds to be used for repaying part of the company’s bank debt, it said.

(By Nicolas Parasie. Additional reporting by Matt Smith, Writing by Tamara Walid; Editing by Miral Fahmy)



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