Aluminium Bahrain to float stake by end of 2010

23 September 2010

Proceeds will be used by Bahrain’s sovereign wealth fund

Aluminium Bahrain (Alba), one of the largest aluminium smelters in the world, plans to launch an initial public offering (IPO) by the end of 2010.

“The listing will definitely happen this year,” said Alba’s chairman Mahmood Al-Kooheji, speaking to Reuters on 21 September.     

Al-Kooheji said the company’s shareholders had not yet decided on the size of the stake to be listed on the Bahrain Stock Exchange (BSE), but said proceeds of the IPO would be used for investment purposes by Bahraini sovereign wealth fund Mumtalakat, which owns a 77 per cent stake in Alba.   

The US’ JP Morgan has been appointed as advisors on the IPO.     

Mumtalakat is planning to divest some of its local holdings and diversify its portfolio to include more international and liquid assets after reporting a loss of BD183m ($485m) for 2009, a 165 per cent fall compared to the $183m it made in 2008.

It attributed the decline to high losses at Alba, which posted a loss of $220.7m in 2009 compared with a profit of $781.9m the previous year. The price of aluminium on the London Metal Exchange, considered a benchmark in the industry, fell from a high of $3,200 per tonne in mid-2008, before bottoming out at $1,250 per tonne in 2009.

The kingdom’s national carrier Gulf Air, another portfolio company, recorded a 21 per cent increase in losses to $502.9m in 2009.  

Analysts say they expect Gulf listing activity to pick up in the coming months as the markets show signs of increasing stability.

Omani mobile phone operator Nawras launched 40 per cent of its shares on the Muscat Securities Market (MSM) on 15 September, making it the first company to list in the sultanate for two years. It expects to raise between $470m and $603m through the IPO.

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