Saudi Developer ACWA Picks Adviser For Home Bourse IPO – Sources

The offering is likely to take place before the end of the year or in the early part of 2015, sources say.

Saudi water and power project developer ACWA Power has chosen the investment banking arm of Banque Saudi Fransi to arrange its debut share sale on the kingdom’s stock exchange, banking sources said on Thursday.

The firm is one of the most eagerly-anticipated listings in the kingdom’s pipeline of initial public offerings (IPOs), both for its success in developing projects across the Middle East and Africa and for the diversification it will offer investors on an exchange dominated by banks and petrochemical firms.

The offering, to be arranged by Saudi Fransi Capital, is likely to take place before the end of the year or in the early part of 2015, said one of the banking sources, speaking on condition of anonymity as the information isn’t public.

“We have not yet mandated a firm but we’re very busy trying to finalise this matter,” Paddy Padmanathan, chief executive of ACWA Power, said when contacted by Reuters. He declined to elaborate.

Padmanathan had said in October that ACWA had just finished a study with consulting firm KPMG about its readiness for an IPO and would start the process to choose advisers, with the end of 2014 targeted for a listing in Saudi.

He wouldn’t be drawn at the time about how much the offering might raise but said the company’s valuation was “a few billion dollars.”

Traditionally, Saudi firms offer 30 per cent of themselves to the public when listing.

One thing that could influence the timing of ACWA’s IPO is the public offering of National Commercial Bank.

Later this year, 15 per cent of Saudi Arabia’s largest lender is due to be offered to the public by the government in a share sale that is expected to be one of the biggest ever in the Gulf region – bankers in Saudi estimate it could be worth between 15 billion and 20 billion riyals ($4.0 billion-$5.3 billion).

Given the amount of cash which investors will be deploying for the NCB offering, other companies may delay their own IPOs to avoid having their demand hampered, a second banking source said.

ACWA has developed a number of projects in Saudi Arabia and has also worked on schemes in Oman, the United Arab Emirates, Mozambique and Morocco.