Aluminium Bahrain Seeks to Raise $541 Million From Initial Share Offering

Aluminium Bahrain BSC, the operator of an 850,000-metric-ton-a-year smelter, plans to raise as much as 204 million dinars （$541 million） from an initial share sale as Persian Gulf markets recover from the global credit crisis.

Mumtalakat Holding Co., Bahrain’s sovereign wealth fund, plans to sell as many as 163.3 million shares between Oct. 24 and Nov. 4 in the IPO, Aluminium Bahrain, known as Alba, said in an e-mailed statement today. Retail investors will be offered shares at 1.25 dinars apiece and institutional investors between 0.9 dinar and 1.25 dinars. Global depository receipts will be sold for $11.97 and $16.62, with each GDR representing five ordinary shares.

Persian Gulf companies are joining a surge in emerging market share sales to raise funds as regional stock markets rebound and companies restructure their debt. Nawras, the Omani mobile-phone company controlled by Qatar Telecom QSC, is in the middle of a book-built IPO. Axiom Ltd., a unit of a Dubai-based phone retailer, plans to sell a 35 percent stake in an IPO by the end of the year.

“The window of opportunity is opening up for the regional issuers after a long lull,” said Robert McKinnon, chief investment officer at Dubai-based Asas Capital Ltd. “You will see more names coming to the market as long as positive sentiments are there. But I haven’t yet seen the most attractive names coming to the market. For example, Emirates Airline and Jumeirah Group LLC are some names in which we will be interested.”

Raised Profile

Alba appointed J.P. Morgan Securities Ltd. as sole global coordinator and bookrunner for the IPO. The bank will manage the sale of GDRs with Citigroup Global Markets Ltd. as co-manager. Gulf International Bank BSC, Bahrain Islamic Bank BSC, National Bank of Bahrain BSC and Al Salam Bank-Bahrain BSC will be the underwriters. The company plans to list ordinary stock on the Bahrain Stock Exchange and GDRs on the London bourse.

“The listing on both the London and Bahrain stock exchanges will raise Bahrain and Alba’s profiles in the international markets and illustrates the progress Bahrain is making as a productive, globally competitive economy,” Talal Al Zain, chief executive officer of Mumtalakat, said in the statement.

The Bahraini government holds 77 percent of Alba and Saudi Arabia owns 20 percent through chemicals maker Saudi Basic Industries Corp. The partners will proportionally split a 3 percent stake owned by Breton Investments Ltd., once Alba completes the purchase of that company’s holding in the smelter.

Financial Flexibility

Alba said in June it plans to convert itself into a public joint stock company to add financial flexibility and allow its aluminum smelter to compete in international markets. The company last month reported a first-half profit of $200 million, beating its own forecasts. Alba said it may exceed internal profit targets this year, without disclosing projected earnings or providing comparison data for the previous year.

The final offering price will be announced on Nov. 8 on the basis of an institutional book-building process, according to the statement. Book-building is a process in which potential investors say how many shares they would buy and at what price.