Saudi Set for Biggest IPO Since 2014

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shopping mall in Saudi; saudi retail; saudi IPO; Fawaz Alhokair
Men and women sit at cafe tables while visiting the Al Yasmin mall in Jeddah, Saudi Arabia, on Sunday, Aug. 6, 2017. Photographer: Tasneem Alsultan/Bloomberg

(Bloomberg) — Fawaz Alhokair Group, the Saudi retailer that owns the franchise for brands like Banana Republic and Zara, may raise as much as $1 billion from the share sale of its malls unit in what would be the kingdom’s biggest initial public offering in five years.

Arabian Centres Co. said Tuesday that it will sell 65 million existing shares and 30 million new shares and will list the shares on the Tadawul stock exchange.

The proceeds of the offering could “be in the range of $1 billion” and might start around April 28, Chief Executive Officer Olivier Nougarou said on a conference call. The company will use the money to reduce debt.

Saudi Arabia’s share sales have slowed as the kingdom’s economy grappled with lower oil prices. Listings by companies and real-estate investment trusts raised close to $900 million last year, down from $6.7 billion in 2014, according to data compiled by Bloomberg.

Samba Capital, Morgan Stanley, NCB Capital and Goldman Sachs Group Inc., Citigroup Inc., Credit Suisse Group AG, EFG-Hermes Holding Co., Emirates NBD, Capital KSA and Natixis SA are managing Arabian Centres’ offering.

Also from Arabian Centres statement:

  • The company operates 19 shopping malls spanning approximately 1.1 million square meters in gross leasable area
  • It plans to add over 300,000 square meters gross leasable area in next 12 months and a further 355,000 square meters in medium term
  • Adding four new malls and one extension in the next 12 months
  • Revenue $576 million in fiscal year 2018
Alhokair was close to hiring investment banks for the share sale in 2015, Muhanad Awad, the then-CEO of FAS Capital, the financial and investment arm of Fawaz Alhokair Group, said at the time.
Two years later, discussions about the possible IPO were halted when the group’s billionaire co-founder Fawaz Al Hokair was among businessmen held in Saudi Arabia’s alleged corruption crackdown, people with knowledge of the matter said at the time. He was freed in January, 2018.Of the more than 300 people held in the probe, only 64 were referred to the public prosecutor, the royal court said this year.

Saudi Set for Biggest IPO Since 2014

With assistance from Filipe Pacheco and Yasmina Daou.To contact the reporter on this story: Sarah Algethami in Riyadh at [email protected]

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