Banks urged to ease lending terms for citizens who subscribed to IPO
DOHA: Banks have been told to offer easier repayment terms to citizens who took out loans to apply for a now-terminated state-sponsored equity offering.
A large number of nationals, including women, have resorted to bank loans to apply for the initial public offering (IPO) of Mesaieed Petrochemical Holding Company (MPHC).
Subscription for the IPO, which was only open to nationals and a few select local institutions, closed on January 21 and the share allocation was announced on Wednesday.
Sources in the banking industry said there are guidelines with banks to be flexible on repayment terms for IPO subscription-related loans.
Some banks have extended repayment terms by up to six months after initially setting shorter terms.
Banks also began to reimburse successful underwriters of the IPO for the oversubscribed portion of the shares.
A large number of people applied for more than 1,633 shares (the maximum that was awarded to individual applicants), so they are getting back the money they paid for additional shares.
According to banking industry sources, subscribers who did not take out bank loans to apply for the IPO receive the refunds directly as the money is credited to their bank accounts.
And as with those who have taken out loans, repayments for the oversubscribed portion of the shares are made after deducting the amount payable for the allocated portion of the shares.
The MPHC IPO was priced at QR 10.20. Of this, QR10 is the face value, while QR0.20 is the service fee for subscription and registration.
The company is expected to be listed on the Qatar Exchange by the end of the month and analysts expect the listing price for its shares to be well above the offering price.
“We expect some equity owners to offload at least 50% of the shares at listing if the listing price is attractive, to repay loans,” a banking industry source said.