It was the biggest-ever IPO by a Middle Eastern company on the London Stock Exchange -- or anywhere, for that matter. Thus Beirut-based mobile phone operator Investcom's sale last month of a 24 percent stake for nearly $780 million might be considered a vote of confidence in Middle Eastern stability.
Ironically, though, instability is what has driven Investcom's success. The company, which had $148 million in net income last year on $633 million in revenues, operates mainly in war-torn, politically isolated or impoverished nations.
Under 33-year-old CEO Azmi Mikati, son of co-founder Taha Mikati, Investcom has intrepidly moved into virtual war zones like Sudan and Liberia. This fall it began building a mobile network in Afghanistan. The company also does good business in Cyprus, Guinea, Syria and Yemen.
For the October 11 IPO, Investcom's shares were priced at $12.35, equivalent to a lofty 22 times earnings; by month's end they were trading at $13.51. The CEO did not profit personally from the IPO, but his father and his uncle Najib, who started the company in 1994 and hold a 70 percent stake, received $411 million.
"The telecom business is actually quite resilient to civil instability or economic downturn," contends Azmi Mikati. "There are problems or conflicts that have impeded development in all of the countries where we operate, but the flip side is that the potential for growth is huge." After all, he points out, people feel more need to talk in bad times than in good.
What country is he considering next? Iraq.