Kuwait telecom operator Zain may be the sole seller in its Iraqi unit's initial public offering which could substantially cut its stake while maintaining its majority control.
Zain Iraq must float a quarter of its shares and list on the Iraq Stock Exchange as part of its US$1.25 billion licence, as were Iraq's two other national operators.
The company expects to finalise details of the initial public offering by the end of June, Wael Ghanayem, Zain Iraq's chief financial and operating officer said.
If the IPO is fully subscribed, Zain's stake in Iraq's largest operator and one of its key subsidiaries could fall to 51 per cent from 76 per cent. It was not clear if Zain Iraq plans to sell more than 25 per cent in the IPO.
The share sale may be Iraq's largest ever, topping Asiacell's $1.27bn floatation earlier in February, with the proceeds likely to be used to improve Zain Iraq's network or repatriated back to Kuwait.
Aside from Zain's stake, the remaining 24 per cent of Zain Iraq is held by "strategic Iraqi investors", according to a statement from Zain.
Separately, Mr Ghanayem said a foreign shareholder will be the seller in the IPO "rather than the existing Iraqi shareholder".
When asked if Zain was indeed the sole seller, Zain was non-committal.
"Zain is actively working on its offer structure which will be subject to approval of all relevant stakeholders," the company said in a statement. "The IPO will, in theory, reduce Zain Group's overall equity in Zain Iraq."
The subsidiary reported a 6 per cent rise in net profit in 2012 to $369 million and accounts for more than a third of group revenue.
NBK Capital, a unit of National Bank of Kuwait, BNP Paribas and Citigroup are advising Zain Iraq on the planned float.
The telco would not comment on what will happen to the IPO proceeds, but analysts say they could be retained in Iraq.
"Zain typically lets its country units run on a stand-alone basis," said Abhinav Purohit, an analyst at IDC in Dubai.
"There's talk of new spectrum being sold in Iraq to allow for 3G services and Zain could use some of the IPO income for network upgrades."