Bahrain Plans IPO For Khalifa Bin Salman Port Operator

Bahrain plans an initial public offering (IPO) of shares in the company operating its Khalifa bin Salman port, the Ministry of Transportation said, in what could be the island Kingdom’s first big IPO since 2010.

Though a listing would serve to fulfil a contractual agreement made when the port opened in 2009, it could benefit from a recent recovery in the Bahrain stock market, where the main index is up 17 per cent year to date after slumping between 2008 and 2012.

Khalifa bin Salman, with the capacity to handle about one million 20ft equivalent units (TEUs) of container cargo annually, is operated by APM Terminals Bahrain under a 25-year concession.

The company is 80 per cent-owned by Netherlands-based APM Terminals, the ports arm of Danish shipping and oil group A.P. Moller-Maersk, and 20 per cent by YBA Kanoo Holdings, a family-controlled Bahraini business group.

The ministry spokeswoman said that under the operating agreement for the port, the operator was to convert from a closed joint-stock company to an open joint-stock company within five years of the start of commercial operations.

“This is purely an implementation of the agreement with the port operator,” she said in an emailed statement, without giving details of the deal. “The government’s role as the industry regulator is to ensure the implementation of the agreement.”

Last month the Bahraini cabinet said it had approved a proposal by the ministry on the conversion but did not elaborate.

Officials at YBA Kanoo Holdings declined to comment on the IPO, while APM Terminals in the Netherlands referred queries to APM Terminals Bahrain.

“At the moment we are in a very early stage and can comment so far that we have a close cooperation with the government and authorities over here in Bahrain,” said Marco Neelsen, chief executive of APM Terminals Bahrain.

“We have not had any talks about potential changes in shareholdings beyond the usual dialogues around … preparatory work related to the future public listing.”

Bahrain’s stock market was hit hard by the global financial crisis and domestic political tensions between 2008 and 2012, but activity has shown signs of reviving in recent months.

In February, telecoms business Zain Bahrain, 56 per cent owned by Kuwait’s Zain, moved closer to a long-awaited IPO, announcing its intention to become a public company in a government newsletter.

In March the deputy chief executive of the bourse said that a company involved in running petrol stations was preparing for an IPO.