Al Jouf Cement Co plans to raise SAR650m (US$173.3m) by selling new and existing shares to the Saudi public, with over half of the proceeds going to the founders of the firm which started operations in May.
Over the July 19-25 period, Al Jouf will offer Saudi investors 27.9 million new shares and 37.1 million existing shares at 10 riyals each to raise the total number of its shares to 130 million, the listing prospectus showed.
About 55.5 per cent of the IPO’s proceeds will go to founding shareholders who include at least one member of the Saudi royal family and other investors such as KSB Capital Group, which is also acting as the financial adviser for the listing along with state-run National Commercial Bank (NCB).
Ibrahim al-Alwan, a senior KSB executive, said KSB’s stake would fall to 6 percent from 12 percent after the IPO.
"The remainder of the proceeds will repay a bridge loan that was taken to fund the capital expenditure and start works on the plant so that production does not get delayed. The production started around the month of May," Alwan told Reuters.
The listing prospectus showed Al Jouf will use SAR171.5m of the proceeds to repay debt and SAR100m to repay unspecified general costs.
In 2009, the firm obtained a SAR220m riyal Islamic loan from NCB to mainly fund its working capital and signed this year an agreement with state-owned Saudi Industrial Development Fund for a financing worth up to SAR483.5m to be repaid over 14 instalments in eight years, it said in the prospectus.