Trowers & Hamlins advises on mobile telecom IPO

Etihad Etisalat recently won the tender to install, own and operate the second GSM and first 3G mobile telecom networks in Saudi Arabia.

The Saudi Arabian Government evaluated competitive bids from International Operators in order to introduce a new mobile telecoms operator to compete with Saudi Telecom, the current monopoly operator.

Trowers & Hamlins says the IPO met a "phenomenal" response from investors and was 50 times oversubscribed.

According to Trowers & Hamlins if the applications are translated into shareholders this would make the IPO one of the broadest in terms of per capita participation ever.

The France Telecom IPO produced one shareholder for every 15.5 French residents
The British Gas IPO produced one shareholder for every 22.8 UK residents population
Etihad Etisalat would produce one shareholder for every 4.6 of Saudi Arabia's population
Under the terms of the license, Etihad was required to offer 20% of its SAR 5 billion (£740 million) equity to the Saudi public at par value of SAR to raise SAR 1 billion (£148 million).

Richard Hildebrand, Partner, of Trowers & Hamlins comments; "We are delighted to be working on what is one of this regions most keenly waited IPOs. The IPO was performed under very tight deadlines and it was helpful for Trowers & Hamlins to be able to call on our many years of experience of having acted on IPOs in various Gulf markets and in London, in closing the transaction. We are delighted to continue our relationship with Etihad Etisalat and look forward to working with them further in the future."

Fayyaz Siddiqui, the CFO of Etihad Etisalat adds: "We are very pleased with the quality of work that has gone into the preparation of our prospectus despite the extremely challenging time table. Trowers & Hamlins ability to dedicate resources with relevant international experience was instrumental in the completion of IPO work on schedule. Etihad Etisalat plans to undertake a further rights issue within the next few months in order to increase the share capital from SAR 5 billion to SAR 7 billion."

Under the terms of the Royal Decree under which Etihad Etisalat is to be incorporated, 20% of the issued share capital of Etihad Etisalat must be offered to the public with a further 20% to be offered within three years of the date of its incorporation. Trowers & Hamlins says that these requirements reflect the Saudi Arabian Government's commitment to a wider level of share ownership amongst the Saudi public.

Under the rules of the participation in the IPO the Capital Markets authority (CMA) of Saudi Arabia, set the minimum subscription at 10 shares and limited the maximum to a relatively modest 10,000 shares per application in order to satisfy demand from small investors.

Trading in the shares on the Saudi Stock Exchange (Tadawul) is expected to commence around the middle of December 2004.

The transaction was led in Abu Dhabi by Toby Wright with assistance from Simon Bryan and overseen by corporate finance partner Richard Hildebrand in London.