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DUBAI, June 5 (Reuters) - Qatari construction firm Aljaber Group is planning a stock market flotation in the Gulf Arab state, sources aware of the matter said, in a listing which could be worth around $800 million.
Initial public offerings have been extremely rare in Qatar due to market volatility and the slow process of securing regulatory approval, with only one -- Mesaieed Petrochemicals in 2014 -- taking place in the last six years.
However, bankers indicate that the authorities have been showing more enthusiasm for new floats in recent months and a number of IPOs as well as companies listing their shares without raising any new cash, as Qatar First Bank did last month, are being worked on.
Among them is Aljaber Group, which was founded in 1976 initially as a retailer of paints and building supplies but which has since expanded into one of the country's largest construction firms.
Aljaber Group didn't respond to a request for comment.
The timing for Aljaber Group's IPO is unclear as it depends on when the market regulator gives a green light, with the authorities in discussions with a number of potential issuers about when deals can emerge, according to one Doha-based source.
One factor which may impact the regulator's thinking is the struggles in the Qatari construction sector brought on by lower oil prices: for example, the number of projects being awarded is down nearly 90 percent year on year, according to Abu Dhabi Commercial Bank.
Floating a real estate-linked business against this economic background would not be wise, according to a second Doha-based source, with conventional wisdom dictating that investors would consider investing now too risky and the issuer concerned about having to sell shares cheaply to get the offering away.
However, a third source, a Gulf-based banker, believed that Aljaber Group was still in a strong position to list as it was doing much better than many of its rivals because it had a long pipeline of government infrastructure projects.
Among these are the gold line of the Doha metro, as well as a number of road building contracts and site preparation works, according to its website.
While an offering worth $800 million would equate to around the same amount raised by Mesaieed in its IPO, the Gulf-based banker was unclear on how much of the company Aljaber Group planned to offer to investors.
(Reporting by David French; Editing by Toby Chopra) ((davidj.french@thomsonreuters.com; +971 4 362 5864; Reuters Messaging: davidj.french.thomsonreuters.com@reuters.net))
Initial public offerings have been extremely rare in Qatar due to market volatility and the slow process of securing regulatory approval, with only one -- Mesaieed Petrochemicals in 2014 -- taking place in the last six years.
However, bankers indicate that the authorities have been showing more enthusiasm for new floats in recent months and a number of IPOs as well as companies listing their shares without raising any new cash, as Qatar First Bank did last month, are being worked on.
Among them is Aljaber Group, which was founded in 1976 initially as a retailer of paints and building supplies but which has since expanded into one of the country's largest construction firms.
Aljaber Group didn't respond to a request for comment.
The timing for Aljaber Group's IPO is unclear as it depends on when the market regulator gives a green light, with the authorities in discussions with a number of potential issuers about when deals can emerge, according to one Doha-based source.
One factor which may impact the regulator's thinking is the struggles in the Qatari construction sector brought on by lower oil prices: for example, the number of projects being awarded is down nearly 90 percent year on year, according to Abu Dhabi Commercial Bank.
Floating a real estate-linked business against this economic background would not be wise, according to a second Doha-based source, with conventional wisdom dictating that investors would consider investing now too risky and the issuer concerned about having to sell shares cheaply to get the offering away.
However, a third source, a Gulf-based banker, believed that Aljaber Group was still in a strong position to list as it was doing much better than many of its rivals because it had a long pipeline of government infrastructure projects.
Among these are the gold line of the Doha metro, as well as a number of road building contracts and site preparation works, according to its website.
While an offering worth $800 million would equate to around the same amount raised by Mesaieed in its IPO, the Gulf-based banker was unclear on how much of the company Aljaber Group planned to offer to investors.
(Reporting by David French; Editing by Toby Chopra) ((davidj.french@thomsonreuters.com; +971 4 362 5864; Reuters Messaging: davidj.french.thomsonreuters.com@reuters.net))
