JEDDAH, 23 October 2004 — Shares in the Kingdom’s new mobile phone company have been 18 times oversubscribed just half way through the offering, Samba Financial Group said yesterday.

Samba, which is overseeing the initial public share offering in Ettihad Etisalat, said almost 2 million subscribers had applied for the stock. The offering opened on Saturday and ends on Oct. 25.

Demand for shares in the consortium led by the United Arab Emirates monopoly telecommunications provider has been so great that scuffles have broken out at banks and subscription forms are being sold on the black market.

At least two banks involved in the issue, Al-Rajhi Banking and Investment Corp. and Banque Saudi Fransi are keeping branches open nationwide throughout Saudi Arabia’s Thursday-Friday weekend to try to meet the demand.

“The number of individual subscribers is nearly 2 million and it is 18 times oversubscribed at this point on Thursday,” Samba Managing Director Eisa Al-Eisa said.

Ettihad Etisalat is offering 20 million shares at SR50 ($13.30) each. If the number of subscribers exceeds 2 million then allocations will be less than 10 shares per applicant - the minimum amount an investor could apply for.

Meanwhile, the Al-Zamil Group is offering interest-free loans to its workers to enable them to buy Etisalat shares.

This was disclosed to Arab News by Dr. Abdul Rahman Al-Zamil, chairman of the Al-Zamil Group, who said the company would arrange loans repayable in monthly installments for the purchase of Etisalat shares. The group has around 2,500 workers.

“The idea in extending the loan facility is to help them benefit from the economic development program. More importantly, it will strengthen their loyalty to, and ties with, the company,” Dr. Al-Zamil said, adding that the Al-Zamil Group has become the first in the Kingdom to come up with an initiative of this kind. Such a measure could go a long way in boosting the employee’s productivity. “They will benefit substantially once the share value appreciates,” he observed.

The business daily Al-Eqtisadiah, a sister publication of Arab News, said Etisalat consortium had requested that its capital be raised from the current SR5 billion ($1.33 billion) to SR7 billion ($1.86 billion).

The Saudi Cabinet in August awarded Etisalat consortium the second mobile phone license in the Kingdom’s lucrative market after Etisalat made the highest financial bid, offering SR12.21 billion ($3.25 billion).

Twenty percent of the company that will operate the 25-year license must be sold off to the public, and a public offering for another 20 percent is required in the third year of operation.

Dr. Al-Zamil also announced that the second Middle East Family Business Conference would be held in Dubai on Dec. 7 and 8. It is being organized by the MEED Conferences, a division of the Middle East Economic Digest (MEED) to provide a platform for promoting family business through creative solutions.

He said experts from abroad would discuss various aspects of family business and what needs to be done to steer family-owned enterprises through various challenges confronting them.

Speaking in the Saudi context, Dr. Al Zamil said 98 percent of the business establishments in the Kingdom are family-owned as against 70 percent or so in the US. The only way for them to survive the global competition was to be responsive to the changes that loom ahead.

In this context, he stressed the need for decentralization of family owned enterprises to make them dynamic entities. “ We at the Al-Zamil Group have involved the younger members of our family in the decision-making process. It was the infusion of the younger blood that was responsible for the launch of the IT companies by our group,” he added.

— Additional input from agencies