A Kuwaiti fund is seeking to swap up to $170 million worth of Moroccan debt for shares in Maroc Telecom's $1.04-billion initial public offering (IPO), a senior government official said on Wednesday. The Moroccan government is offering up to 130.99 million Maroc Telecom shares, including a "greenshoe" over-allotment option, for 54.6-68.25 dirhams ($6.5-$8.1) a share for local institutional investors and 4.9-6.12 euros for foreign ones.
European-based sources familiar with Morocco's leading telecoms firm said the market had already covered order books for the IPO, midway through the November 22-December 7 subscription. Maroc Telecom will start trading in Casablanca and Paris on December 13.
The Kuwaiti Investment Agency (KIA) contacted Rabat for the swap query after the start of the IPO, the official said.
"Initially they wanted to convert all our debts ... some $170 million. We said the only way for them was to go to the market, buy the stock and we'll reimburse them in (Moroccan) dirhams," said the official at the Finance and Privatisation Ministry.
"They insisted time and again but we can't grant favours ... They are now in the market seeking the maximum," he added.
The official said Rabat had received "very positive feedback" from world markets on the progress of the IPO.
"The order books are already very comfortably covered," a European-based source familiar with Maroc Telecom said.
Neither Maroc Telecom officials or the IPO lead managers were immediately available for comment.
A Moroccan telecoms analyst said KIA would probably need to wait for the greenshoe option, worth some $134 million.
"I think the Moroccan state will want to keep this (KIA) joker card in the event of bad surprises, although everything seems to be running smoothly for the moment," he said.
A few days before the IPO's launch, Rabat took world markets by surprise with the sale of 16 percent of Maroc Telecom to French media group Vivendi Universal which already held 35 percent of the company.
The 1.1-billion euro deal boosted interest in Morocco's biggest ever IPO.
"The average (local) institutional investor orders 80 percent of the shares he really wants to buy at the ceiling price (68.25 dirhams), and the rest at around 60 dirhams," said a senior fund manager taking part in the IPO.
The retail investors' tranche, worth a fifth of the offer, is also under way at 68.25 dirhams a share and will close on Friday.
A telecoms analyst predicted that Maroc Telecom's IPO would set a record for the number of retail subscribers in a single listing. The company allocated 120 million dirhams to promote the IPO in the media and in the country's airports, he said.
Maroc Telecom's CEO, Abdeslam Ahizoune, told the semi-official Le Matin daily newspaper this week the IPO attracted an "exceptional rush". He gave no details.
"The price bracket offers a 60-30 percent discount on what Vivendi paid to take control of Maroc Telecom. It's both a very important discount and a factor for the success of the listing," said Mohamed Benabderrazik, fund manager and director at MSIN brokerage firm.
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