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| Asiacell $1.2 billion IPO | |
| Distributor selling agent | Rabee Securities |
| return to the Deals of the Year 2013 index | |
Frontier markets are in vogue and there are few markets less tapped than Iraq. It is perhaps fitting, then, that in February 2013 Iraq produced the biggest IPO in the Gulf region since the 2008 global financial crisis: the $1.2 billion listing of mobile phone firm Asiacell.
Mobile telephony is a hot sector, particularly in frontier markets. Asiacell and its peers in Iraq are also regarded as well-run companies – which bodes well for Zain Iraq and Korek Telecom. Those firms (it is hoped) are due to follow Asiacell with listings in Baghdad.
As part of Asiacell’s IPO, Qatar Telecom (QTel, now known as Ooredoo) increased its stake in the firm from 53.9% to 64.1%. Asiacell’s shares traded upwards in the weeks following the listing. However, completing the transaction was by no means easy.
The company’s $5 billion valuation was roughly equal to the market capitalization of the entire exchange before the listing and the size of the transaction was equivalent to several hundred times average daily trading. Iraqi regulatory idiosyncrasy was another challenge.
Local firm Rabee Securities, headed by Shwan Taha – a US-educated former fund manager – was sole distributor and selling agent. “The IPO process was much harder than I expected,” said Taha at the time of the listing. “Remember we were trailblazing with this listing, so I am sure that the next listing will be much easier.
“I expect that businessmen will start looking at the market as a viable means to gather capital or exit some of their holdings. Iraq is still a difficult place to predict […] but I think the genie is out of the bottle and we will have a viable market from now on.”
