Zain Iraq commences IPO

Zain Iraq has set its long-awaited initial public offering (IPO) into motion, creating a new company with which to register its Iraqi stock. The IPO will consist of 55.9 million shares, available to the public for a 30 day period at IQD1 each.

The new Iraqi firm, named Al-Khatem, will list a quarter of Zain’s stock on the Iraq Stock Exchange, as stipulated by the terms of Zain’s $1.25 billion licence. Issued in 2007, the licences oblige all holders to do the same.

In February this year, Ooredoo subsidiary Asiacell issued shares in the first major offering since 2003, when the country was invaded by a US-led alliance. It was the largest ever share issue on the ISE, and as a result the country’s stock market roughly doubled in size.

Since Zain’s IPO could generate even more money than Asiacell’s, there is a serious possibility that the ISE’s systems may not be able to cope with the increased number of trades they will be forced to handle.

All three of Iraq’s operators have flaunted the original 2011 deadline for IPOs, largely due to concerns that investors would be deterred by political instability.

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