First Qatari IPO in Three Years and QFMA’s New Listing Rules

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Qatar Petroleum (QP) recently announced the first initial public offering (IPO) in Qatar since 2010 and the introduction by the Qatar Financial Markets Authority (QFMA) of new listing rules. The IPO is also the first IPO issuance since Qatar and the UAE were upgraded from “frontier” to “emerging” market status by MSCI earlier in the year. Shares in Mesaieed Petrochemical Holding Company Q.S.C. (MPHC) are being offered within Qatar to eligible Qatari investors. The IPO is expected to raise QAR 3.2 billion (US$880 million).

Innovative Incentives

The IPO incorporates an innovative incentive share scheme designed to encourage the development of a personal savings culture in Qatar. IPO investors who retain at least 50% of their shares will receive two sets of additional shares – free of charge – in five and ten years’ time (provided they hold 50% of their original shares by that time). The Qatari government has also announced it will buy 750 shares in MPHC as a gift for each disadvantaged Qatari citizen and those with special needs.

The IPO is expected to be the first of a series of equity offerings in Qatar designed to enable Qatari nationals to participate in the country’s hydrocarbon wealth and boost liquidity on the Qatar Exchange. While the MPHC IPO is only open to Qatari nationals, foreigners can invest in the secondary market subject to foreign ownership restrictions imposed by law and MPHC’s Articles of Association. The IPO has received considerable press attention in Qatar and throughout the region.

Key Stakeholders

MPHC is a subsidiary of QP, holding large stakes in three key players in Qatar’s petrochemical sector – Qatar Chemical Company Ltd. (Q-Chem I), Qatar Chemical Company II Ltd. (Q-Chem II) and Qatar Vinyl Company (QVC). MPHC’s operations are based at Mesaieed Industrial City in the south-west of Qatar.

IPO Details

Issuer:

Mesaieed Petrochemical   Holding Company Q.S.C.

Offering:

323,187,677 shares   (25.725%)

Offer price:

QAR 10 per share (plus   offering and listing costs of QAR 0.20 per share)

Offer period:

31 December 2013 – 21   January 2014

Photo: Getty Images