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Kuwait’s KIPCO eyes Turkish market

KIPCO eyeing financial services buy in Turkey; Co expects to get regulatory approval for dinar bond in November; GDR plans shelved; may consider LSE listing or ADR

October 27, 2011 11:41 by

Kuwait Projects Co, Kuwait’s largest investment company, is eyeing a foray into Turkey’s financial services market, its group chief financial officer said on Wednesday.

Pinak Maitra, speaking at the Reuters Middle East Investment Summit, also said the firm, known as KIPCO, was looking at expanding its pay television and financial services investments in the Middle East and North Africa region.

“If you speak of Turkey, we are interested,” Pinak Maitra told the Reuters Middle East Summit, when asked whether KIPCO might join the growing list of banks eyeing Turkey’s Denizbank .

“We are looking at opportunities in financial services there.”

Several banks, including Qatar National Bank , Russia’s Sberbank and Dubai’s Mashreq , have expressed interest in Denizbank, the fast-growing Turkish arm of euro zone debt casualty Dexia.

Bankers say other lenders such as HSBC and Italy’s Intesa Sanpaolo are also circling the unit.
KIPCO, which owns stakes in 70 companies in 26 countries, said the aftermath of the Arab Spring had resulted in more investment options for the Kuwaiti firm.

“There are many owners of assets in Egypt, for example, and today there are discussions,” he said. “Those dialogues were not even possible (before the Arab Spring).”

Elsewhere in North Africa, expanding its pay-television subsidiary Orbit Showtime Network to Tunisia is high on the list, Maitra said, adding KIPCO was more cautious about venturing into Libya.

“The banking business is virginal (in Libya) … but clearly the transitional process is going to take time. For us, it’s going to be about a year before we see anything there.”

KIPCO, which posted a 76-percent rise in second-quarter net profit in August, said in March that it expected 2011 profits to be in the same range as last year, when it had net profit of 33.8 million dinars ($123 million).

On Wednesday, Maitra said full-year profits could be slightly below that forecast.

“We want to be more conservative accounting-wise … We think we will come slightly lower than that (2010).”

KIPCO is still awaiting approval from Kuwait’s Capital Markets Authority for a local currency bond issue worth up to 80 million dinars ($290 million), with a maturity of three to seven years.

“We expect to get regulatory approval post-Eid,” Maitra said, referring to the Muslim holiday marking the end of the Haj pilgrimage next month.

He said there were no other imminent plans to raise capital. Asked whether KIPCO would revive plans to offer global depositary receipts, Maitra said it was not the right way to go.

“We were considering the GDR … to create a currency of the KIPCO stock, but the liquidity around the GDRs so far doesn’t suggest that that is happening,” he said, adding no plans were in the works now but: “if we were to think of that channel, it would be a main listing on the LSE (London Stock Exchange) or ADRs (American depositary receipts) in America.” (Additional reporting by Jason Benham, David French and Reed Stevenson; Editing by Amran Abocar and Will Waterman)

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