Mezzan optimistic for IPO on Kuwait Stock Exchange

Mezzan, which acts as the sole distributor in Kuwait of hundreds of products by big-name brands, will debut its shares on the Kuwait Stock Exchange on Thursday, with shares initially priced at 7.40 dinars a piece.

The chief executive of Kuwait’s Mezzan Holding is confident of investor demand for its shares, as the fast-moving consumer goods company prepares to become the first company to launch an initial public offering on the country’s stock exchange since late 2008.

Mezzan, which acts as the sole distributor in Kuwait of hundreds of products by big-name brands including Dettol, Kleenex, Listerine, Pif Paf and Huggies, will debut its shares on the Kuwait Stock Exchange on Thursday.

The listing comes after a private placement of 88.95 million shares, equivalent to 30 per cent of its share capital, conducted between April 1 and May 12.

“We’re expecting demand to be strong,” the company’s chief executive Garry Walsh said.

“With our private placement process we only really marketed to reasonably wealthy people, with a minimum purchase of about 15,000 dinars, so I think we’ll see a lot of people who couldn’t get in initially coming in [when the shares go on general sale].

“We also know that a lot of funds that subscribed and didn’t get what they wanted are very keen to acquire post-listing as well.”

Mezzan’s decision to list on the Kuwait Stock Exchange flies in the face of the decision by a series of companies, including Kout Food Group, United Industries and Pearl of Kuwit Real Estate, to delist from the bourse because of limited liquidity and poor share price performances.

Kuwait’s stock exchange is this year’s second-poorest performing stock exchange in the Arabian Gulf region, behind Bahrain.

The country’s bourse has declined 3.16 per cent so far this year, compared with a 5.7 per cent rise posted by Dubai and a 15 per cent increase in Saudi Arabia.

Mr Walsh insisted, however, that there was plenty of investor demand for properly run, profitable enterprises.

“A lot of the companies we’ve seen drop off the exchange are typically investment or real estate vehicles that should never have been listed in the first place,” he said.

“If you look at the companies that are well-run and well-governed – the likes of NBK, Agility and so on – there’s no problem with liquidity, and hopefully we’ll fall into that category.”

The company last week announced a profit of 5.5m dinars for the first three months of the year, a year-on-year increase of 24.8 per cent.

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