* Zain Bahrain planned IPO in 2008, but sale was abandoned
* Unit's 9-mth profit to Sept. 30 fell by more than half
By Matt Smith
DUBAI, April 10 (Reuters) - Telecom operator Zain's Bahraini unit has received government approval tolaunch a long-awaited initial public offering (IPO), the companysaid on Wednesday.
Former Kuwaiti monopoly Zain did not provide further detailson the IPO, although a local Bahrain newspaper said the unit hadbeen ordered by the cabinet to float 15 percent of its shares.
Bahrain's second mobile licence was awarded to Zain in 2003- ending Bahrain Telecommunications Co's (Batelco)monopoly - and the unit had planned to launch an IPO in 2008,only for the share sale to be abandoned.
Since then, Zain Bahrain's competitive position hasdeteriorated following the 2010 launch of third mobile operatorViva Bahrain, a subsidiary of Saudi Telecom Co, whichhas slashed prices to woo customers.
Zain Bahrain's net profit for the nine months to Sept. 30fell by more than half and its revenue fell 5 percent over thesame period, so now may be an inopportune time to float.
Zain holds a 56.3 percent stake in Zain Bahrain. Othershareholders include Zain Bahrain's chairman, Sheikh Ahmed binAli Abdulla al-Khalifa, who owns 16.3 percent, while Vodafone and a government pension fund own 6.1 and 4.7 percentrespectively, according to research by Zawya, a Thomson Reuterscompany.
It is unclear whether existing shareholders will sell sharesin the IPO on a proportional basis, thereby taking Zain's stakebelow 50 percent.
Zain Bahrain would likely list on Bahrain's bourse,which has a combined market value of $16.3 billion.
Trading is thin, with daily volumes averaging 3.4 millionover the past year, according to Reuters data. This activity isconcentrated among a few stocks, with only five seeing more than50,000 shares change hands on Wednesday.
"The cabinet decision is also a signal that the time isright for an IPO and the market is ready," Zain Bahrain chairmanSheikh Ahmed said in a statement issued by parent Zain.
The Telecommunications Regulatory Authority (TRA) was notimmediately available for comment.