Aluminium Bahrain (Alba) hopes to raise up to BD204m ($540m) through a listing on the Bahrain Stock Exchange, as part of plans by the company’s majority owner, Mumtalakat, to start diversifying away from local investments.

Bahrain sovereign wealth fund Mumtalakat owns a 77 per cent stake in Alba and plans to sell up to 163 million company shares, equivalent of up to 11.47 per cent of its holding.

The retail portion of the offering will be priced at BD1.250 per share, while the price range has been set at BD0.900-1.250 a share for institutional investors.

The retail offering period for the IPO will run from 24 October until 4 November, with trading expected to start on 5 December. The shares will be listed on the Bahraini bourse and as global depositary receipts (GDRs) on the London Stock Exchange (LSE).

All proceeds of the IPO will go to new investments as Mumtalakat seeks to diversify its portfolio into more international and liquid assets after reporting a 165 per cent year-on-year decline in profit in 2009 to BD183m ($485m).

It partly 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, on the back of a steep fall in aluminium prices. Alba is one of the largest aluminium smelters in the world.

“Mumtalakat was set up to help grow the wealth of Bahrain and drive value creation in the strategic non-oil and gas related assets of Bahrain, and this process supports those aims,” said Talal Al-Zain, chief executive of Mumtalakat, speaking at a press conference held in Manama on 17 October.   

The US’ JP Morgan has been appointed as adviser on the IPO, and the US’ Citigroup is acting as co-manager on the GDR sale.