01 May 2008

-Dubai's FPI drops $554 mln IPO, deals blow to DIFX

Lebanon's Makhzoumi family dropped plans to raise up to $554 million in an initial public offering of its Dubai-based Future Pipe Industries (FPI), dealing the latest blow to the emirate's international standards exchange.

The Makhzoumis had planned to sell up to 35 percent of FPI -- which makes wide-diameter fibre-glass pipes -- and list the stock on the Dubai International Financial Exchange (DIFX).

"Due to conditions in the equity capital market and recent events in the financial markets, (FPI) will not be proceeding with its proposed global offering at this time," FPI said in a statement on Thursday. It did not give further details.

FPI was pricing its shares at between $5 and $6.6 each, valuing the company at between $1.2 billion and $1.58 billion.

"It's another setback for the DIFX," said Tamer Bazzari, head of principal investments at Dubai-based Rasmala, which manages about $1.3 billion of asset for customers, mainly in Arab markets. "There is just not sufficient liquidity."

This is at least the second time a company that planned to list on the DIFX has dropped its IPO. In 2006, Oger Telecom, owned by Lebanon's Hariri family, cancelled plans to raise $1.25 billion through selling shares that would it list on the DIFX.

Dubai-government owned DP World DPW.DI was last year the first company to list its stock solely on the DIFX after raising almost $5 billion in the Middle East's biggest IPO. Its stock has since fallen 20 percent.

Shares of Depa Ltd DEPA.DI, a Dubai interiors contractor which raised $432 million in an IPO last month and with which FPI was competing for funds, are down 8 percent since listing on the DIFX on April 23.

Dubai set up the DIFX in 2005 to encourage local companies to sell shares to the public, and for foreign companies to tap growing regional wealth. Thirteen companies are on the exchange, of which three are primary listings.

DP World, which was criticised for selling its shares at the top of its price range of $1.30 in October, is the only company with no listing elsewhere.

Unlike other Gulf exchanges, DIFX operates according to international standards of accounting and financial reporting.

DIFX is 33 percent-owned by exchanges group Nasdaq OMX Group (NDAQ.O: Quote, Profile, Research). Spokesman Mark Fisher said he could not immediately comment when Reuters called. FPI Chief Executive Officer Rami Makhzoumi could not immediately be reached for comment.

Deutsche Bank AG (DBKGn.DE: Quote, Profile, Research), Citigroup Inc (C.N: Quote, Profile, Research) and Dubai-based Mashreq MASB.DU advised FPI on the share sale.

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

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

The 35 million Gulf population is growing as economies surge on a five-fold increase in oil prices during the past six years, and as foreigners move in, attracted by job opportunities and tax-free income.

FPI's net profit almost doubled last year to $69 million on a 57 percent surge in revenue to $556.4 million, Makhzoumi said in March.

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. (Reporting by Amran Abocar; Editing by David Hulmes)


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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.