Morgan Stanley quits as bookrunner on Iraqi Asiacell IPO: source

Tue Sep 25, 2012 9:05am EDT
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By Matt Smith

DUBAI (Reuters) - Morgan Stanley (MS.N: Quote) has quit as a bookrunner on Iraqi telco Asiacell's initial public offering, a source familiar with the matter said on Tuesday, signaling the flotation on the Iraqi bourse will increasingly rely on local investors.

This leaves HSBC (HSBA.L: Quote) and Baghdad-based broker Rabee Securities to manage the IPO as joint bookrunners, although Morgan Stanley will advise Asiacell's parent firm Qatar Telecom QTEL.QA (Qtel) on the share sale, the source said.

"Morgan Stanley is still an advisor to Qtel on the IPO, but the growing focus on the Iraqi market is why Morgan Stanley has changed role," the source said on condition of anonymity.

"HSBC and Rabee have branches in Iraq and are local players - Morgan Stanley isn't - and you need people on the ground for this deal. It was agreed between all parties that this was the way to go given the domestic orientation of the IPO."

Morgan Stanley declined to comment.

In September, a senior official at the telecoms regulator, Ahmed Alomary, said he expected Asiacell shares to start trading in early 2013.

Asiacell and rival operators Zain Iraq, a subsidiary of Kuwait's Zain (ZAIN.KW: Quote), and France Telecom FTE.PA affiliate Korek were required to float a quarter of their shares by August 2011 as part of their $1.25 billion license agreements in what would be the first major IPOs since the U.S.-led invasion that toppled Saddam Hussein in 2003.

The three operators were fined for missing this deadline, but have appealed.   Continued...