Biggest Saudi Airline Seeks Up To $678 Million In Cargo Firm IPO
Date
9/25/2023 4:33:33 AM
(MENAFN- The Peninsula) Bloomberg
Saudi Arabia's biggest airline and another shareholder are seeking to raise as much as 2.54 billion riyals ($678 million) in the Riyadh initial public offering of cargo firm SAL Saudi Logistics Services Co., as the kingdom's market for listings springs back to life.
Saudi Arabian airlines Corp., also known as Saudia, and Tarabot Air Cargo Services Ltd. are offering 24 million shares - a 30% stake - at 98 riyals to 106 riyals each in the cargo firm, according to a statement on Monday. The price range values SAL at as much as 8.48 billion riyals.
The bookbuilding period for institutional investors will run until Oct. 1 while retail buyers will be able to place orders from Oct. 11 to Oct. 13. Saudia currently owns 70% of SAL, while Tarabot owns 30% of the firm.
SAL's IPO comes on the same day car rental firm Lumi Rental Co. is set to debut. Oil driller ADES Holding Co., backed by the kingdom's sovereign wealth fund, last week drew $76.5 billion in orders for its $1.2 billion IPO, the country's largest this year.
The deals point to a resurgence of activity in what is usually the Persian Gulf's biggest and busiest listings market after a slow first half of the year. A drop in Saudi Arabia's stock market from the second half of last year through to March on weaker oil prices helped put a brake on listing activity, with offerings only picking up again at the start of the summer.
Crude prices have rallied strongly this quarter as Saudi Arabia and Russia extended their production curbs through the end of the year, while the benchmark Tadawul Index has climbed about 10% from its March low.
Saudi Arabia has outlined an ambition to become a global supply chain hub and develop one of the largest airports in the world in Riyadh, as part of its plans to diversify the economy.
SAL is the leading cargo handling player in Saudi Arabia with a roughly 95% market share and also handles transit and export shipments. The company had revenue of 1.22 billion riyals ($325 million) in 2022 and net income of 362 million riyals. In the first half of this year, SAL posted revenue growth of 15% year-on-year.
HSBC Holdings Plc's Saudi unit has been appointed as sole financial advisor, bookrunner, global coordinator, lead manager and underwriter for the IPO.
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