Latham & Watkins advised Qatar Petroleum (QP) on the US$880 million (QAR3.2 billion) initial public offering (IPO) of shares in Mesaieed Petrochemical Holding Company Q.S.C. (MPHC), a QP subsidiary, at an offer price of QAR10 per share plus offering and listing costs.
The successful IPO, which closed on 21 January 2014 and was five times oversubscribed, was the first in Qatar since 2010, making it also the first IPO under the current listing rules of the Qatar Financial Markets Authority (QFMA) and the first since Qatar was upgraded from “frontier” to “emerging” market status by MSCI in 2013. A total of 323,187,677 shares in MPHC were offered within Qatar to eligible investors (being Qatari national individuals and certain selected Qatari institutions). Shares in MPHC were admitted to trading on the Qatar Exchange in Doha on 26 February 2014.
MPHC is a holding company owning large stakes in three key players in Qatar’s petrochemical sector – 49 percent of Qatar Chemical Company Ltd. (Q-Chem I) and Qatar Chemical Company II Ltd. (Q-Chem II) as well as 55.2 percent of Qatar Vinyl Company Limited (QVC) Q.S.C. MPHC’s operations are based at Mesaieed Industrial City in the south-west of Qatar.
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 percent of their shares will receive two sets of additional shares – free of charge – in five and ten years’ time (provided they hold 50 percent of their original shares by that time). The Qatari government also announced it would 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 was 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 Latham & Watkins team was led by corporate partners Ahmad Anani and Andrew Tarbuck. Our team worked closely with QNB Capital (as Lead Financial Advisor) and Deutsche Bank (as Financial Advisor).