BAGHDAD, (Reuters) – Iraq’s three main mobile phone companies appear unlikely to meet a month-end deadline to list on the local stock exchange, raising the chances of them being penalised, authorities say.
Zain Iraq, Asiacell and Korek are all required by Iraqi law to launch initial public offerings on the Iraq Stock Exchange (ISX) by Aug. 31 as part of their 15-year, $1.25 billion operating licences, secured in 2007.
None of the three limited companies has yet become a shareholding firm, a key requirement and the first main step towards going public on the local bourse.
“They must match the requirement to be a shareholders’ company before anything,” ISX Chief Executive Taha Abdulsalam told Reuters.
“After that, we will talk about listing.”
Iraq did not have a mobile phone market under Saddam Hussein but the sector has grown rapidly since the 2003 U.S.-led invasion that toppled the former dictator
There are now around 23 million mobile phone subscribers in the country, according to the Communications and Media Commission (CMC), which regulates telecommunications in Iraq.
Abdulsalam said after becoming shareholding companies, the mobile phone firms would need approval from the ISX board and Iraq’s securities commission in order to be listed.
He said the ISX board decision could take 24 hours while the securities commission may take up to a week to give their consent. It would then take 2-3 weeks before the companies would be ready to trade.
Abdulsalam said it was impossible for Zain Iraq, a unit of Kuwait’s Zain , Asiacell, an affiliate of Qatar Telecom (Qtel), and Korek, part-owned by France Telecom SA and Kuwait’s Agility , to list on the bourse by end-August.
Zain Iraq CEO Emad Makiya said the IPO process was on track but that it was complicated and taking longer than expected.
AsiaCell and Korek could not be reached for comment.
The CMC said the contracts with the phone companies signed in 2007 still stood and that failure to list on the local bourse would result in the firms being penalised.
“We still insist that they have to reach the licence conditions within the deadline of 31 August,” CMC Commissioner Ahmed Alomary told Reuters.
“Otherwise they will receive penalties.”
Alomary and Safa’a Al-Din Rabie’e, head of the CMC Trustees Council, said a decision had not been made on the type of penalties the companies would receive.
The CMC fined Zain $262 million in January for putting 5 million Sim cards in the local market without permission, contravening its licence. The firm was previously fined $18.6 million in 2009 for poor service.