The Jubail and Yanbu (Marafiq) power and water utility has announced plans to proceed with its initial public offering (IPO) and listing of its shares on the Saudi Tadawul Stock Exchange.
Marafiq’s move follows recent Capital Markets Authority (CMA) approval to list 73.1 million common shares, representing 29.24% of the Company’s issued share capital. Almost 51.2 million shares will be allocated to institutional investors.
Earlier this year, Bloomberg reported that Marafiq intended to raise SR 4.5 billion ($1.2 billion) by selling a 30 percent stake and had hired HSBC Holdings and Riyad Capital to manage the IPO .
Marafiq, a major player in the regional utilities sector, was incorporated under the Royal Decree issued in October 2000 as a public company owned by four main shareholders – Saudi oil giant Aramco, the Jubail and Yanbu Royal Commission, Saudi Basic Industries Corporation (Sabic) and the Public Investment fund. Each shareholder owns 24.81%, while private sector investors own 0.76%.
According to Marafiq, after accounting for minority shareholders, the offer will represent a 30% free float at listing.
The final price at which all subscribers to the IPO will purchase shares will be determined at the end of a bookbuilding process, she added.
Commenting on the forthcoming IPO, Khalid M. Al Salem, Chairman of the Board of Directors of Marafiq, said: “Marafiq is a critical component of Saudi Arabia’s industrial ambitions, which are central to the Kingdom’s 2030 Vision. With our strong foothold in two of Saudi Arabia’s most strategic industrial cities and a growing presence across the Kingdom, the IPO is an opportunity for investors not only to benefit from our steady and reliable cash flow, but also to be part of an exciting growth story.”
Marafiq is an integrated utility with a presence across the power and water value chain.
Together with its various subsidiaries, Marafiq is responsible for the delivery of utility services in strategic Royal Commission industrial cities in the Kingdom of Saudi Arabia and is expanding its presence across the Kingdom.
Praising the move, President and CEO Mohammed Al Zuabi said, “Today’s announcement marks an important milestone in Marafiq’s journey, a journey that began nearly 20 years ago when we began providing power and water services in Jubail and Yanbu. Since then we have grown into an integrated utility company offering a full range of services across the entire utility value chain with a growing presence in the Kingdom of Saudi Arabia.”
The IPO announcement comes at a time when Marafiq is working on several major projects in the Kingdom such as the Jeddah Airport 2 Independent Sewage Treatment Plant project which is on track to start commercial operations in the first quarter of 2023.
The project, with a capacity of 500,000 cubic meters per day, will be implemented by Marafiq under a BOOT (Build, Own, Operate and Transfer) concession model.
“With our track record of operational excellence and the highest standards of service quality, we have built long-standing relationships with some of the largest industrial companies in the world and look forward to helping them realize their ambitions in the growing Kingdom of Saudi Arabia.”
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