DUBAI, June 8 (Reuters) - Britain's Kingsway Capital has started meetings with big tobacco firms as the private equity firm prepares to sell its stake in Dubai-based tobacco business Advanced Inhalation Rituals (AIR), two sources familiar with the matter told Reuters.
Kingsway, the majority owner of AIR, has held talks with potential investors including British American Tobacco (BATS.L) and Japan Tobacco (2914.T), said the sources, declining to be named as the matter is not public.The talks are part of a dual-track process, where a seller pursues a sale and an initial public offering (IPO) at the same time.Reuters reported in March that Kingsway had hired Rothschild & Co (ROTH.PA) to advise it on options for AIR, including a possible IPO.
Kingsway, Rothschild and Japan Tobacco did not immediately respond to a request for comment. AIR and BAT declined to comment.An IPO would take place in the region, either on Saudi Arabia's Tadawul or the Abu Dhabi Securities Exchange, the same sources told Reuters in March.
Kingsway in 2020 took private Jordan-domiciled and Amman Stock Exchange-listed Al Eqbal Investment Company in a transaction valued at more than $1.4 billion including debt. The company was then rebranded as AIR.Private equity firms generally seek to exit their investments five to seven years after buying in.
AIR's most valuable business is Al Fakher, which manufactures flavoured molasses for shisha pipes sold in more than 100 countries, according to its website. It also produces OOKA, a pod-based device that simulates the experience of smoking shisha without the charcoal.
An investment in AIR would provide global tobacco makers access to the shisha and the vaping equivalent e-shisha market in the Middle East and beyond, the sources said.
Middle Eastern companies bucked global trends last year to raise about $22 billion through IPOs, according to Dealogic, which was more than half the total for the wider Europe, Middle East and Africa region.
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