30 March 2008

-Lebanon's Makhzoumis plan Future Pipe IPO in Dubai

DUBAI, March 30 (Reuters) - Lebanon's Makhzoumi family said on Sunday it plans to sell shares in an initial public offering of its Dubai-based Future Pipe Industries (FPI), a maker of fibre glass pipes used in city infrastructure and industry.

The Makhzoumis, who set up FPI in 1984, plan to sell as much as 35 percent of the company next month and list the stock on the Dubai International Financial Exchange (DIFX), Chief Executive Rami Makhzoumi told reporters in Dubai on Sunday.

FPI has benefited from a surge in Gulf Arab spending over the last few years on infrastructure for towns and cities, as well for industries such as oil and gas.

Profit at the company almost doubled last year to $69 million on a 57 percent surge in revenue to $556.4 million, Makhzoumi said.

"The sheer amount of surplus liquidity available for infrastructure spend is immense," Makhzoumi said.

London-based MEED magazine estimates Gulf Arab states and companies have announced or are constructing physical projects worth more than $2 trillion during the last four years, including $430 billion on oil and gas.

The Makhzoumi family will use the IPO funds to diversify its investments, Makhzoumi said, declining to be more specific. Company Chairman Fouad Makhzoumi, a Sunni Muslim from Beirut, is also a politician who opposes the Lebanese government of Fouad Siniora and has previously run unsuccessfully for parliament.

The IPO could raise at least $400 million, valuing FPI at between at $1.4 billion and $1.8 billion, people familiar with the transaction who did not want to be identified, said.


This will be only the second company to list 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.

Dubai-based interiors contractor Depa Ltd is also planning an IPO next month and a DIFX listing, as well as listing in London. It is looking to raise at least $400 million.

Deutsche Bank AG (DBKGn.DE: Quote, Profile, Research), Citigroup Inc (C.N: Quote, Profile, Research) and Dubai-based Mashreq MASB.DU are advising on the FPI sale. The sale to individual investors starts on April 13 and ends April 21.

The 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.

FPI sells wide-diameter pipes in 50 countries, generating 76 percent of its income in the Gulf. In 2006, it controlled 11.6 percent of the $3.5 billion global market in fibre glass pipes, Makhzoumi said. In the Gulf, that share was more than 50 percent.

Revenue and profit will grow at roughly the same rate for the next several years, as the Gulf market expands and developed countries such as the United States look to replace aging steel and concrete systems with fibre glass systems that are lighter and just as strong, Makhzoumi said.

The 35-million strong population of the Gulf is growing 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 percent of its profit, Makhzoumi said.

In the Gulf, FPI's biggest competitor is the Saudi Arabian Amiantit Co 2160.SE, which is listed in the kingdom. Last year, it made a profit of 64 million riyals ($17.07 million), according to its Web site.

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Lebanon Time-Line

Introducing Lebanon

Coolly combining the ancient with the ultramodern, Lebanon is one of the most captivating countries in the Middle East. From the Phoenician findings of Tyre (Sour) and Roman Baalbek's tremendous temple to Beirut's BO18 and Bernard Khoury's modern movement, the span of Lebanon's history leaves many visitors spinning. Tripoli (Trablous) is considered to have the best souk in the country and is famous for its Mamluk architecture. It's well equipped with a taste of modernity as well; Jounieh, formerly a sleepy fishing village, is a town alive with nightclubs and glitz on summer weekends.

With all of the Middle East's best bits - warm and welcoming people, mind-blowing history and considerable culture, Lebanon is also the antithesis of many people's imaginings of the Middle East: mostly mountainous with skiing to boot, it's also laid-back, liberal and fun. While Beirut is fast becoming the region's party place, Lebanon is working hard to recapture its crown as the 'Paris of the Orient'.

The rejuvenation of the Beirut Central District is one of the largest, most ambitious urban redevelopment projects ever undertaken. Travellers will find the excitement surrounding this and other developments and designs palpable - and very infectious.

Finally, Lebanon's cuisine is considered the richest of the region. From hummus to hommard (lobster), you'll dine like a king. With legendary sights, hospitality, food and nightlife, what more could a traveller want?

Introducing Beirut

What Beirut is depends entirely on where you are. If you’re gazing at the beautifully reconstructed colonial relics and mosques of central Beirut’s Downtown, the city is a triumph of rejuvenation over disaster.

If you’re in the young, vibrant neighbourhoods of Gemmayzeh or Achrafiye, Beirut is about living for the moment: partying, eating and drinking as if there’s no tomorrow. If you’re standing in the shadow of buildings still peppered with bullet holes, or walking the Green Line with an elderly resident, it’s a city of bitter memories and a dark past. If you’re with Beirut’s Armenians, Beirut is about salvation; if you’re with its handful of Jews, it’s about hiding your true identity. Here you’ll find the freest gay scene in the Arab Middle East, yet homosexuality is still illegal. If you’re in one of Beirut’s southern refugee camps, Beirut is about sorrow and displacement; other southern districts are considered a base for paramilitary operations and south Beirut is home to infamous Hezbollah secretary general, Hassan Nasrallah. For some, it’s a city of fear; for others, freedom.

Throw in maniacal drivers, air pollution from old, smoking Mercedes taxis, world-class universities, bars to rival Soho and coffee thicker than mud, political demonstrations, and swimming pools awash with more silicone than Miami. Add people so friendly you’ll swear it can’t be true, a political situation existing on a knife-edge, internationally renowned museums and gallery openings that continue in the face of explosions, assassinations and power cuts, and you’ll find that you’ve never experienced a capital city quite so alive and kicking – despite its frequent volatility.