Morgan Stanley will no longer act as the bookrunner for the initial public offering (IPO) of Iraqi mobile operator Asiacell, Bloomberg reports, citing three people with inside knowledge of the discussions. While the New York-based financial services corporation will still proceed as an adviser on the deal, the US bank will not manage Asiacell’s actual share sale because it does not have a client base inside Iraq, where most of the demand for the IPO is expected.
Morgan Stanley was originally hired alongside HSBC Holdings as managers for the offering, which has been tipped to happen as early as next month. It is expected to raise as much as USD1 billion through the sale of a 25% stake, the biggest such transaction in Iraq to date. Rabee Securities, a Baghdad-based brokerage, is also believed to be assisting with the management of Asiacell’s IPO.
According to TeleGeography’s GlobalComms Database, under the terms of their operating licences, Iraq’s three national mobile operators were required to float their capital on the ISX within four years, as the bourse was not ready to handle the listings when the concessions were handed out in 2007. In March 2009 the government reiterated the operators’ obligation to list around 25% of their shares, in a move that could triple the value of shares on the stock market to over USD6 billion. With progress proving to be painfully slow, in June this year Iraq’s Communications and Media Commission (CMC) revealed that it would fine Asiacell USD8,500 a day, applied retroactively from 1 September 2011 for its failure to list; rival mobile operators Korek Telecom and Zain Iraq were also incurred financial penalties. Asiacell finally won approval to list on the ISX from the stock market regulator last month.