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Reuters
DOHA
Qatari company Baladna, which is creating a dairy industry in the desert to help the country to battle a siege by neighbours, is planning an initial public offer of its shares (IPO) to raise funds and bring in strategic investors, sources familiar with the matter said.
The privately-owned firm has chosen QNB Capital, the investment banking arm of Qatar National Bank, to arrange the IPO for the first half of 2018, said the sources, who declined to be named because the matter isn't public.
One source said the IPO might value the company, which flew 3,400 cows into Qatar during the initial weeks of the blockade to address a shortage of fresh milk, at about QR2 billion ($550 million).
However, the sources said the valuation process had not been completed. Baladna and QNB Capital declined to comment.
The IPO plan underlines one way in which Qatar is seeking to strengthen its economy in the face of the siege by building up domestic companies to develop local production of key goods and services.
Saudi Arabia, the United Arab Emirates, Bahrain and Egypt cut diplomatic and trade ties with Qatar in June.
In response, the Qatari government has been giving logistical and other support to companies such as Baladna to foster domestic production.
Qatar's 2018 state budget, released this week, includes a plan to award QR29 billion of contracts to support growth in the private sector.
Baladna, owned by Qatari businessmen Moutaz and Ramez al Khayyat, is looking to bring in a mix of strategic, institutional and retail investors with the IPO, one of the sources said.
The listed firm would hold assets including Baladna's farm, the milk production business, and the bottling operation, the source said.
Qatari conglomerate Investment Holding Group was the latest IPO, in August this year.
Following its initial airlift of cows, Baladna plans two sea shipments ” each of 3,300 animals ” into Qatar by February, its chief executive told Reuters last month. Another consignment of 3,000 cows is on the cards but not yet ordered.
To cope with the climate in Qatar, where the temperature can approach 50 degrees centigrade in summer, Baladna's cows are housed in sheds that are cooled by fans and jets of mist.
By next June, the company says, it expects to raise production of fresh milk and yoghurt to 500 tonnes a day, enough to meet 100 percent of domestic demand for those products with 100 tonnes left over for export.
