KUWAIT CITY, 28 November 2004 — Kuwait tomorrow will launch the largest initial public offering (IPO) in the emirate’s history for the establishment of the Qurain Petrochemicals Industries Co., officials said yesterday.
Under the offering, some 990 million shares, or 90 percent of the capital, worth 99 million dinars ($336 million) will be sold to Kuwaiti citizens, said Petrochemicals Industries Co. (PIC) Chairman Saad Al-Shuwayeb. State-owned PIC has bought 10 percent of the stocks of the company which has a capital of 110 million dinars ($373 million). The National Bank of Kuwait (NBK) will act as lead manager of the offering, while Ernest and Young Consultancy will be the implementing manager. Shuwayeb said the IPO aimed at attracting more private investors into the developing petrochemicals industry in Kuwait. Qurain will in the initial stages invest in a number of existing petrochemical companies and projects and at a later stage could launch its own projects, he said.
QPIC is Kuwait’s second private sector share holding company for petrochemicals after Boubiyan Petrochemicals was established in the mid-1990s as a 10 percent partner in the PIC-Dow Chemical equal joint venture, Equate Petrochemicals, which set up Kuwait’s first olefins plant. QPIC is expected to buy six percent of Equate Petrochemicals, which will proportionately reduce shares of the other partners, NBK officials said.
“Boubyan Petrochemical has signed a conditional sale deal for the equivalent of one percent of Equate Petrochemical’s capital for $42 million, based on the new evaluation for Equate Petrochemical,” the Kuwait Stock Exchange said in a statement. Equate in 2003 posted a net profit of $276 million, up 160 percent over 2002. Meanwhile, Boubyan Petchem’s profit for the year ended April 30 nearly doubled to 12.45 million dinars ($42.3 million).