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Asiacell IPO Fully Booked in Biggest Mideast Sale Since 2008

Asiacell Communications PJSC’s share sale, the Middle East’s biggest initial public offering since 2008, was fully subscribed before its closing date, according to the Iraqi IPO’s organizer.

“The offering is now comfortably covered with a good mix of retail and institutional demand from within Iraq as well as institutional and high net worth demand from abroad,” Shwan Ibrahim Taha, chairman of Rabee Securities, said in an e-mail to Bloomberg News. Asiacell Chief Executive Officer Diar Ahmed confirmed the subscription in a phone interview today.

Asiacell, majority-owned by Qatar Telecom QSC, (QTEL) planned to raise 1.49 trillion dinars ($1.3 billion), the most for an IPO in the Middle East and North Africa since Saudi Arabian Mining Co.’s (MAADEN) share sale more than four years ago, according to data compiled by Bloomberg. The IPO will help double the market value of the Iraq Stock Exchange from $4.66 billion last year, Chief Executive Officer Taha Ahmed Abdul-Salam al-Rubaye said earlier this month. That compares with $9 billion for Lebanon’s gauge.

“Such big success will encourage other big entities to follow suit and will help the Iraq Stock Exchange attract more institutional investors into Iraq,” Asiacell’s Ahmed said.

The Sulaymaniyah-based company offered 67.5 billion shares, or 25 percent of its share capital, in the IPO that opened Jan. 3. The offering will close as scheduled on Feb. 2 and shares are due to start trading Feb. 3 on the Iraq Stock Exchange, Ahmed said.

Growth Story

‘‘Asiacell is the last growth story in the region’s telecom arena as the mobile penetration rate in Iraq is very low compared to peers,” Sebastien Henin, who helps oversee $90 million at The National Investor in Abu Dhabi, said by phone. “There’s a lot of room to grow in Iraq.”

Iraq, home to about 34 million people, has a mobile penetration rate of about 77 percent, according to Henin. That compares with about 200 percent in the United Arab Emirates, which has a population of about 8.2 million.

Political instability in the country shouldn’t hurt Asiacell’s growth given high demand, Henin said, referring to bouts of violence and sectarian tension in the country after the U.S.-led invasion that toppled Saddam Hussein nine years ago. The benchmark ISX General Index fell 4.7 percent in 2012, compared with a gain of 3.7 percent for the Bloomberg GCC 200 Index (BGCC200) of Persian Gulf stocks, according to data compiled by Bloomberg.

‘Wave of Listings’

Asiacell obtained a 15-year mobile telecommunications license in 2007 and had 43 percent market share by revenue at the end of September, with 9.9 million individual and corporate subscribers. The share sale is the first in “a wave of listings” that will boost activity on the stock exchange, the bourse’s head said earlier this month.

Like Asiacell, Iraq’s two other main mobile companies -- Zain Iraq (ZAIN), a unit of Kuwait’s Mobile Telecommunications Co., and Korek Telecom, part-owned by France Telecom SA (FTE) -- must sell 25 percent of their shares on the bourse as part of their contract.

“Asiacell will force international skeptics to reconsider their views about the exchange and Iraqi equities, and potentially lead to increased investment,” Geoffrey Batt, managing director of the $44 million Euphrates Iraq Fund, said by phone today.

To contact the reporter on this story: Nayla Razzouk in Dubai at nrazzouk2@bloomberg.net

To contact the editor responsible for this story: Stephen Voss at sev@bloomberg.net

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