Lebanon's Makhzoumi family said on Sunday it plans to sell shares in an initial public offering of its Dubai-based Future Pipe Industries, a maker of fibre glass pipes used city infrastructure, as well as in oil and gas.
The Makhzoumis, who set up Future Pipe in 1984, plan to sell as much as 35 per cent of the company in a sale next month, and list the stock on the Dubai International Financial Exchange (DIFX), Chief Executive Officer Rami Makhzoumi said.
"The proceeds will be used to diversify the investments of the family," Makhzoumi told reporters in Dubai.
He declined to give details on how much the family aimed to raise from the sale of existing shares.
The company could raise at least $400 million, valuing it between at $1.4 billion and $1.8 billion, people familiar with the transaction said.
This will be only the second time that a company lists its ordinary shares solely on the DIFX, which Dubai set up in 2005 to encourage local companies to sell shares to the public, and for foreign companies to tap growing regional wealth.
Deutsche Bank AG, Citigroup Inc and Dubai-based Mashreq are advising on the sale. The sale to individual investors starts on April 13 and ends April 21.
The FPI sale, the first by a family for the DIFX, will be open to nationals of six Gulf Arab countries, including Saudi Arabia and Kuwait, and residents of the United Arab Emirates, Makhzoumi said.
It will also be open to global financial services companies.
Makhzoumi, a Sunni Muslim from Beirut, has twice run unsuccessfully for parliament in Lebanon and opposes the government of Prime Minister Fouad Siniora.
FPI sells wide-diameter pipes in 50 countries and last year generated revenue of $556.4 million, compared with $354.2 million in 2006.
The company made $69 million in net profit last year, compared with $37 million a year earlier, Makhzoumi said. Revenue and profit may grow at the same rate for the next several years, Makhzoumi said, declining to give a more detailed forecast.
FPI manages 11 plants that make the pipes, with its biggest markets in the Gulf where governments are developing urban areas, as well as their oil and gas industries. FPI generates 76 per cent of its revenue from the Gulf and has an 11.6 per cent share of the global market in fibre-glass pipes worth $3.5 billion in 2006, Makhzoumi said.
It controls at least 50 per cent of the Gulf fibre glass market, he said.
The population of the Gulf is growing beyond its 35 million as economies surge on a five-fold increase in oil prices during the last six years, and foreigners move to the region attracted by job opportunities and tax-free income.
FPI will pay dividends equivalent to about 25 per cent of its profit, Makhzoumi said.
In the Gulf, FPI's biggest competitor is the Saudi Arabian Amiantit Co, which is listed in the kingdom. Last year, it made a profit of $17.07 million, according to its website. (Reuters)
Makhzoumis plan Future Pipe IPO in Dubai