Arabian centers will raise up to $ 836 million in the largest IPO in Saudi Arabia since 2014

DUBAI (Reuters) – Saudi Arabian mall operator Arabian Centers Co could raise up to 836 million US dollars at the top end of its initial public offering (IPO) price range on Sunday. sales prospectus.

The IPO would be the largest in the country since the Saudi lender, the National Commercial Bank, raised $ 6 billion in 2014, according to Refintiv data.

According to the document, the Arab centers plan to sell 95 million shares for 26 riyals to 33 riyals, with a market capitalization of between 12.4 billion and 15.7 billion riyals (3.3 billion and 4.2 million yuan). billions of dollars).

Owned by the Fawaz Alhokair Group, this offer will be the first in the kingdom under rule 144 bis, which allows the sale of securities primarily to qualified institutional buyers in the United States.

It will also be the first major IPO in Saudi Arabia this year as the kingdom tries to overcome the international aftermath of the murder of journalist Jamal Khashoggi last year.

Riyadh has encouraged more family businesses to register to deepen its capital markets as part of reforms to reduce dependency on oil revenues.

The kingdom also wants to stimulate local entertainment and attract foreign visitors, at a time when subsidy cuts and new taxes are weighing on household budgets.

Arabian Centers owns 19 shopping centers, making it the largest owner and operator of shopping centers in Saudi Arabia by gross leasable area as of December 31, 2018, the prospectus states.

The gross proceeds from the sale of new shares would be used to repay the debt, the document says. The transaction includes 65 million existing shares sold by the current shareholders and 30 million new shares, with the listing scheduled for the end of May.

In-store retail still dominates the Saudi market, accounting for 97% of total retail trade in 2018, according to a market study cited in the prospectus.

Arabian Centers plans to expand its operations to 27 shopping centers four years from now, including four over the next 12 months, announced its managing director Olivier Nougarou earlier this month.

Four cinemas are already under construction, and another 12 are expected to arrive in the next two years, he added. Last year, the ban on movie theaters has been lifted for decades.

Fawaz Alhokair, the majority shareholder of the Fawaz Alhokair group, was arrested by the Saudi authorities as part of an anti-corruption investigation, during which dozens of senior officials and businessmen were detained at the hotel Ritz Carlton Riyadh at the end of 2017.

Many, including Alhokair, were released after being laundered or entering into agreements with the government.

Morgan Stanley, Capital Samba, NCB Capital and Goldman Sachs are the PAPE's financial co-advisers and bookrunners. Among the other bookrunners are EFG Hermes KSA, Citigroup, Emirates NBD Capital, Credit Suisse and Natixis.