x Abu Dhabi, UAEMonday 22 January 2018

$500m IPO for Bahrain's state-run aluminium producer

A $500 million initial public offering for Bahrain's government-owned aluminium producer is launched by the state's investment fund Mumtalakat.

Bahrain's state-owned aluminium producer launched an initial public offering today that will raise more than US$500 million (Dh1.83 billion) for the country's beleaguered sovereign wealth fund, the company's majority owner.

Mumtalakat, the state-owned investment fund, is selling an 11.5 per cent stake in Aluminium Bahrain (Alba), which operates the second-largest smelter in the Gulf. The sale will reduce the fund's stake in Alba to 65.5 per cent, with the balance of shares held by Saudi Basic Industries Corporation and a group of German investors.

The proceeds will fund the growth of Mumtalakat, said Talal al Zain, the fund's chief executive. Mumtalakat raised $750m earlier this year through a bond offering, but is laden with heavy liabilities including full ownership of the country's money-losing airline, Gulf Air.

"This IPO will support Mumtalakat's strategy to grow the wealth of Bahrain and drive value creation in strategic non-oil and gas related assets, as well as helping attract foreign direct investment into the country," Mr al Zain said.

The company will sell over 163 million ordinary shares in the company valued at an initial offering price of 1.25 Bahraini dinars (Dh12.17) per share over the next two weeks. That translates into a capital raise of $514m.