Saudi PIF-backed ADES Holding seeks to raise SAR4.6bn from IPO

Saudi Arabia’s ADES Holding Company has started taking investor orders for its planned initial public offering (IPO), which is aimed at raising as much as SAR4.6bn ($1.21bn) at a price range of SAR12.50 and SAR13.50 per share.

The company is selling 237.1 million new shares in the IPO while its shareholders, which include Public Investment Fund, ADES Investments Holding and Zamil Group Investment, are selling about 101.6 million shares.

“The sale shares represent 9 per cent and the new shares represent 21 per cent of the company’s issued share capital upon completion of the offering, totalling 30 per cent of the issued share capital,” ADES Holding said in a statement.

The oil and gas driller is offering the shares in two tranches — institutional investors and retail investors— between September 10 and September 14, with the final offer price expected to be announced on September 20.

ADES Holding 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.

The company’s revenue from contracts with customers reached SAR1.98bn ($528m) in the first half of the year. It made a profit of SAR397.6m in 2022.

“ADES Holding’s IPO on the Saudi Exchange marks an important milestone for the Company and is a key step in realising our ambitious growth strategy,” said Mohamed Farouk, CEO of ADES Holding.

The Al Khobar-based oil and gas driller intends to use the proceeds from the public offering to reduce part of its indebtedness and fund its growth strategy as well as for general corporate purposes.

EFG Holding’s EFG Hermes, Goldman Sachs Group, JPMorgan Chase & Co. and SNB Capital are financial advisers and global coordinators for the IPO.

ADES Holding joins GCC IPO frenzy

Saudi Arabia is seeing a surge in IPOs after car rental firm Lumi Rental Company priced its $290m offering at the top of the range last Friday.

State-backed companies in the Gulf region are stepping up efforts to boost domestic equity markets while supporting regional governments’ efforts to diversify their economies away from heavy reliance on oil revenues.

The GCC raised a total of $5.3bn in proceeds through 21 offerings in the first half of 2023, marking a year-on-year decline in value by 61 per cent compared to $13.6bn a year ago, Kuwait Financial Centre (Markaz) said in its Initial Public Offerings (IPO) in the GCC markets report.

In the neighbouring UAE, there has been almost $4bn worth of listings, according to the data.

Earlier in September, Oman’s OQ Gas Networks, the pipelines business of state oil giant OQ, said it plans to list a 49 per cent stake on the Muscat Stock Exchange (MSX) – in what is expected to be the biggest offering in the sultanate in almost two decades.

GCC IPO pipeline

The GCC stock markets are bracing for yet another year of record listings, and the IPOs to look out for in H2 2023 include Saudi media conglomerate MBC Group, Amanat Holdings and Investcorp Holdings’ investment vehicle Investcorp Capital.

Read: GCC stock markets are hitting record highs. Here’s why