Saudi Arabia’s Ades to List as Riyadh’s Biggest 2023 IPO
DUBAI: Ades Holding Co’s initial public offering (IPO), which seeks to raise as much as 4.6 billion riyals, was oversubscribed within hours of announcing the price range for what’s set to be Saudi Arabia’s largest offering this year.
The range has been set at 12.5 riyals to 13.5 riyals a share, valuing the company at as much as 15.2 billion riyals, according to a statement.
The oil and gas driller is selling 237.1 million new shares in the offering, while its shareholders – Public Investment Fund (PIF), Ades Investments Holding Ltd and Zamil Group Investment Ltd – are selling about 101.6 million shares.
The total stake being offered is 30% of the company.
The IPO was multiple times oversubscribed throughout the range and within hours of opening books, according to terms of the deal obtained by Bloomberg News.
Book-building for institutional investors runs until Thursday, while retail buyers will be able to place orders from Sept 26 to Sept 28.
The final offer price is due to be announced on Sept 20.
The PIF teamed up with the major owners of then London-listed Ades to take the business private in 2021, in a deal valuing the company at about US$516mil.
Ades, which provides oil and gas drilling and production services in the Middle East and North Africa, has since grown through acquisitions.
It has a fleet of 85 rigs and operations across seven countries, including India where three rigs will be operating this year, according to its website.
Its major clients include Saudi oil giant Aramco, Kuwait Oil Company and North Oil Company in Qatar, which accounted for over 95% of Ades’ backlog as of the end of last year, its prospectus shows.
Usually one of the Persian Gulf’s busiest markets for listings, Saudi Arabia has had a relatively slow start to the year.
Less than US$900mil-worth of listings have started trading in the kingdom this year, an 82% drop from a year earlier, data compiled by Bloomberg show.
Now, Ades and car rental firm Lumi Rental Co – which last Friday priced its US$290mil IPO at the top of the range – are set to boost that tally.
The outlook for the kingdom’s stocks is also brightening with a 12% rally in the benchmark Tadawul index since March lows after earnings and relatively stable oil prices boosted optimism.
Ades’ revenue from contracts with customers increased to 2.47 billion riyals last year from 1.51 billion riyals in 2021. It made a profit of 397.6 million riyals in 2022.
It intends to use the proceeds from the IPO to reduce part of its indebtedness and fund its growth strategy as well as for general corporate purposes.
EFG Hermes, Goldman Sachs Group Inc, JPMorgan Chase & Co and SNB Capital are financial advisers and global coordinators for the IPO. — Bloomberg
