M Stanley no longer bookrunner on Iraqi Asiacell IPO

01 Oct, 2012

Morgan Stanley has ceased to be a bookrunner on Iraqi telecommunications firm Asiacell's initial public offer of shares, a source familiar with the matter said on Tuesday, signalling the IPO will increasingly rely on local investors.
Morgan Stanley will advise Asiacell's parent firm Qatar Telecom (Qtel) on the share sale, leaving HSBC and Baghdad-based broker Rabee Securities to manage the IPO as joint bookrunners, the source said.
"Morgan Stanley is still an advisor to Qtel on the IPO, but the growing focus on the Iraqi market is why Morgan Stanley has changed role," the source said on condition of anonymity.
"HSBC and Rabee have branches in Iraq and are local players - Morgan Stanley isn't - and you need people on the ground for this deal. It was agreed between all parties that this was the way to go given the domestic orientation of the IPO."
Morgan Stanley declined to comment.
Asiacell last month received preliminary approval from Iraqi regulators to launch its delayed IPO, and placed advertisements in Iraqi newspapers two weeks ago to publicise the flotation.
The advertisements stated the shares would be on sale "in weeks" but did not provide further details, and it remains unclear how much if any of the offer will be open to foreign investors.
Asiacell and rival operators Zain Iraq, a subsidiary of Kuwait's Zain, and France Telecom affiliate Korek were required to float a quarter of their shares by August 2011 as part of their $1.25 billion licence agreements in what would be the first major IPOs since the US-led invasion that toppled Saddam Hussein in 2003.
The three operators were fined for missing this deadline, but have appealed.
The Iraq Stock Exchange, which has a combined market capitalisation of about $3.4 billion and trades around $3 million daily, seems ill-equipped to absorb the listings - in 2011, Nomura gave Zain Iraq an enterprise value (equity plus debt) of $4.9 billion and Asiacell $4.4 billion.

Read Comments