Wataniya Palestine offering attracts more than 5,000 retail investors

30 November 2010

Telecoms offering will be oversubscribed, says industry head

Mobile telecoms operator Wataniya Palestine has attracted more than 5,000 retail investors for its 15 per cent stake offering on the Palestine Exchange (PEX), which is due to close on 2 December.  

“Over 5,000 retail investors have subscribed so far, which is a big number for our market,” says Ahmad Aweidah, chief executive officer of the Palestine Exchange (PEX).

“The number of investors tends to double in the last week, so I have no doubt that it will be covered and I’m confident that it will be oversubscribed.”

The mobile operator is in the process of converting orders from international funds in the UK, US and UAE.

With a paid-up capital of $817m, Wataniya has targeted raising $50.3m through offering a total of 38.7 million shares, priced at $1.30 a share.

“It will be the largest company on the PEX in terms of paid-up capital and, depending on how many funds are raised, the second or third largest in terms of market capitalisation,” says Aweidah.

Based on the offer price, Wataniya’s market capitalisation is forecast to reach about $335.4m, and its listing is expected to play a key role in deepening the PX.

“It’s not every day we get a company of the size and potential of Wataniya coming onto the market, so it is attractive prospect. Mobile telecoms is a very hot industry in Palestine today as it is a very underpenetrated market,” says Aweidah 

Palestine’s mobile penetration rate stood at 49 per cent at the end of 2009, among the lowest in the Middle East. For example, Jordan’s penetration rate stood at 101 per cent at the same date.

Wataniya broke the monopoly of Jawwal, owned by the Palestine Telecommunications Company (Paltel) when it began functioning as the second Palestinian mobile operator in November 2009.

It has beaten forecasts for subscriber growth with more than 310,000 customers today, covering 95 per cent of the Palestinian population in the West Bank, which equates to a mobile market share of 19 per cent. It generated revenues of $24.7m in the first nine months of 2010.

Aweidah also confirmed that the PEX, which has a paid-up capital of $10m, is on target to float a 25 per cent stake in the second quarter of 2011, but is first looking to diversify its shareholders.

It is currently controlled by holding company Padico, which in turn is owned by a number of leading Palestinian businessmen.

“We’re interested in bringing one or two new institutional investors on board who could each acquire a 10 per cent stake before we launch the IPO,” says Aweidah. “We’re looking at regional sovereign wealth funds or regional investment banks as potential partners.”

Today, there are 41 companies listed on the PEX with a combined market capitalisation of about $2.5bn.

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