Bahrain-based investment bank launches major IPO

The IPO is the first of its kind in the region, and will provide the general public with the opportunity to own part of Jawad International Fashion (JIF), a subsidiary of Jawad Business Group (JBG).

JIF was incorporated by the Jawad Business Group in mid-2003 to operate several international fashion brands including BHS, Mango, Adams, Shoe City, and Hush Puppies throughout the GCC.

KFI's Chief Executive Officer, Nabil Hadi, said, "We are thrilled to be an integral part of this IPO process, especially since it is the first of its kind by a regional retailer. After orchestrating the successful private placement of stake earlier this year, and working collectively with JBG and BDO Jawad Habib throughout the process, we are eager to open up JIF stock ownership to the public."

KFI initially formed a strategic relationship with Jawad Business Group (JBG) in early 2004, to assist the group in achieving its strategy of evolving into a publicly traded company.

JBG's strategy moved into action with the offering of 30% of its shares to the private sector through a private placement process arranged and managed by KFI.

In early 2005, Khaleej Fashion Franchises (KFF) was formed by KFI as a closed Bahrain shareholding company with the sole purpose of acquiring a 30% stake in JIF.

Upon the formation of KFF and its subsequent acquisition of 30% effective ownership of JIF, the stake was privately offered and was concluded within 5 working days by regional investors.

Mr.Hadi added, "after the IPO was approved by the JIF board to offer 40% of the company share capital to the public, all involved parties have worked hand in hand in the past few months to obtain all the necessary approvals. We recently got the blessing of the Prime Minister's Cabinet. Upon completion of the IPO, the company will be owned 51% by JBG, 9% by KFF, while members of the public will own the remaining 40%."

In line with JBG's corporate strategy to grow and develop their business units in intervals, they intended to organically grow JIF as an entity and take the steps needed to execute an IPO.

"We are eagerly anticipating the completion of the public offering, and I am thankful for KFI and BDO Jawad Habib and all of their team members for their tremendous contribution to the forthcoming IPO," said Faisal H. Jawad, Chairman and Chief Executive Officer of Jawad Business Group.

Jawad added," in the last 8 months, the performance of JIF has been well above the initial projections, and shareholders have been rewarded with an interim dividend of 17% in August 2005."

JBG, a 45-year old company that holds the franchise rights of brands such as Hush Puppies®, BHS, Adams, Brantano Shoe City, and MANGO, operates 46 stores under these brand names across the GCC.

Based on the information provided by Jawad, JIF's strategy revolved around operating the brands in all major malls including Mall of Emirates, Marina Mall-Abu-Dhabi, Bahrain City Centre, Villagio-Qatar, Festival City-Dubai, Mall of Arabia-Dubai, and Khalidiya Mall, Abu-Dhabi to name a few. The store count is expected to increase to 66 by the end of 2007.

"I would like to thank the Ministry of Commerce and Industry, Bahrain Monetary Agency, BSE, and the authorities in the Kingdom for their support in our efforts to create the first listed retail company in the region," said Jawad.

From his side, BDO Jawad Habib Senior Partner Mr.Jawad Habib added," It was a great pleasure to work with JBG and KFI throughout the IPO process. As the auditors of the JIF, BDO is working closely with KFI during these final stages of completing the offering circular, that will include all company related information, and actual forecasted financials."

"We as the financial advisors, along with BDO Jawad Habib as Auditors, are working hand-in-hand to finalise all of the specifics of this offering. We have collectively completed the draft of the offering circular," said Nabil Hadi.

"I would like to thank JBG for their continued trust in KFI and our affiliates not forgetting to express my gratitude to his H.H.Sh.Khalifa Bin Salman al-Khalifa, the Prime Minister, BMA , and the Ministry of Industry and Commerce for their continues support to the private sector," he concluded.