Bahrain regulator instructs Lead Manager to postpone Naseej IPO

The instructions, made less than three weeks before the planned November 18 IPO launch date, were made, as per an official statement by the CBB, "due to current market conditions" and specifically "requires the Naseej IPO to be postponed".

The IPO, which could have been the largest to be launched from Bahrain, was announced about two weeks ago by Khalid Abdulla-Janahi, Chairman of Ithmaar Bank, the IPO Lead Manager, following a meeting of major Naseej Shareholders. The announcement was based on the fact that the underwriters, which included prominent financial institutions, had chosen to guarantee the full issue.

"The Naseej Founding Shareholders, which include Ithmaar Bank, recognise the tremendous opportunities presented by the current market conditions. These conditions create significant new investment opportunities and, if the establishment of Naseej was viable and appealing a few months ago, then these new opportunities make it even more appealing today," said Janahi. "We are confident, and eager to capitalise on this unique opportunity," he said.

"Following the announcement, we received significant interest both from institutional and individual investors in the IPO and about BD70m was set to be injected by regional investors into Bahrain's financial system," said Janahi. "This would have further improved liquidity in Bahrain's financial markets," he said.

"Despite the anticipated success of the IPO, the Naseej Shareholders have chosen to recognise and respect the wisdom of the CBB's decision," said Janahi. "The Shareholders however, in view of their convictions - both in terms of the opportunities created by current market conditions and in terms of the success of Naseej - have decided, in the meanwhile and as a transitional phase, to nonetheless establish the Company. The IPO, including issue fees, will be announced when that option becomes available," he said.

Janahi said he did not expect an extended delay between the establishment of Naseej and the IPO announcement because, he said, the fundamentals of Bahrain's financial systems were solid.

"We have invested extensive research on these IPO plans and a lot of people have put in a lot of hard work,"

said Janahi.

Janahi also said he appreciates the tremendous efforts invested by the underwriters and the receiving banks.

The establishment of Naseej will contribute, directly, to addressing one of the Kingdom's most pressing socio-economic challenges, that of affordable housing.

Naseej will manage the entire spectrum of the construction and real estate business, from the initial planning stages, to manufacture of building materials, design, project management, and marketing advisory services for developments as well as building, construction and facility management. In doing so, it will create, among other things, unprecedented synergies that will help create affordable housing solutions to the general public.

Naseej brings together major regional investors from both the private and public sectors. The Founding Shareholders comprise of leading regional institutions, real estate players, financial players both in the conventional and Islamic banking space, mortgage and affordable housing institutions and High Net-Worth Individuals (HNWI) with expertise in real estate sector and other similar players who will provide long-term benefits to the Company.

They include Ithmaar Bank BSC, Social Insurance Organization, BBK BSC, Ithmaar Development Company, Eskan Bank, Palm Capital, Shamil Bank BSC, Global Investment House (Kuwait), Abu Dhabi Investment House, Faisal Islamic Bank of Egypt and Khaleeji Commercial Bank B.S.C