Industries Qatar IPO launched

09 May 2003
The biggest initial public offering (IPO) in four years was launched for subscription on 8 May. For the Industries Qatar (IQ)IPO, Qatari nationals have been given a month to apply for shares. Industries Qatar has been formed through the transfer of state interests in four Mesaieed companies - Qatar Petrochemical Company, Qatar Fertiliser Company, Qatar Fuel Additives Companyand Qatar Steel Company(MEED 25:4:03).

Fifteen per cent of IQ's total share capital of QR 5,000 million ($1,370 million) will be offered in the IPO. Of this, 20 per cent has been reserved for three non-profit organisations, the Qatar Foundation, the Retirement Fund and the Ministry of Awqaf & Islamic Affairs.

The IQ shares will have a face value of QR 10 ($2.7) each but will be offered at a price of QR 16 ($4.4) each, plus a fee of QR 0.5 ($0.14) a share to cover the IPO expenses. The minimum subscription is 100 shares, while the maximum is 750,000.

The offering will be made through seven local banks. Qatari companies will only be allowed to buy shares once the IPO has been closed and IQ has been listed on the Doha Securities Market (DSM - stock market).

The IPO, which will raise over QR 1,200 million ($330 million), is expected to be heavily oversubscribed, given that IQ's assets are in profitable industries with proven track records. The offering is seen as part of the government programme to redistribute wealth and raise the economic profile of the private sector, rather than a revenue-raising exercise.

Qatar Petroleum (QP) is due to appoint a seven-member board to IQ and will provide ongoing assistance to the company. QP has been advised on the project by HSBC, Clifford Chanceand Ernst & Young.

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