Saudia Dairy and Foodstuff Company (SADAFCO) Monday announced that it will offer 30 percent of its existing shares to Saudi Arabian nationals at SR260 per share from Monday 25 April 2005. This Initial Public Offering will be made through The National Commercial Bank (NCB) which acts as Financial Advisor, Sole Underwriter and Lead Manager.
The offer comprises 1.95MM shares or 30 percent of SADAFCO’s shares for a total offering value of SR 507MM. 10 percent of the offering, or 195,000 shares, will be placed with selected Saudi institutional investors and 90 percent of the offering, or 1,755,000 shares, will be offered to Saudi individuals.
The offer to subscribe for SADAFCO shares that will be listed on the Saudi Arabian Stock Exchange (SASE) will remain open for 10 days from April 25th until Wednesday 4 May 2005. Shares allocations will be announced on Sunday 8 May 2005.
SADAFCO Managing Director, Ahmed Mohammed Hamid Al Marzouki, said “the initial public offer (IPO) of SADAFCO shares is a pioneering event because it is the first time in Saudi Arabian history that a fully underwritten offer of shares in a private company has been determined by a ‘book-build process’ among institutions.
“The combination of SADAFCO becoming a public company via the IPO, full underwriting by NCB and the book-build process to determine the offer price, make this listing on the SASE a pioneering event,” he said.
NCB’s Corporate Sector Head, AbdulRahman Addas, said “NCB is very proud of acting as financial advisor, sole underwriter and lead arranger of this landmark transaction which is the first of its kind and breaks new ground in terms of equity capital market offerings in the Kingdom”.
The public can collect application forms to subscribe for shares from NCB branches or at the branches of receiving banks: SAMBA, Al Rajhi and Banque Saudi Fransi (BSF).
Individual applicants must apply for at least 10 SADAFCO shares, and after that in multiples of 10 up to 1,000 shares, however applicants may be allocated fewer shares in the event of over-subscription.
On 8 May, four days after the subscription period closes, applicants will be notified about the number of shares they have been allocated by the bank at which they submitted their application form. Excess funds invested will be returned on Monday 9 May 2005 and share trading will commence a few days later.
Mr Marzouki said “the share offer will provide investors with an opportunity to share in the success of a company whose products include the popular Saudia milk range.”
Existing shareholders including United Industries Company (UIC), a KIPCO Group company, will retain a stake in SADAFCO after the IPO.
Mr Marzouki said “SADAFCO has solid business prospects and is strongly positioned in growth markets such as dairy products, juice products, and tomato paste.
“The company also has a wide distribution network extending to Sudan, Oman, Yemen, Syria, Jordan, Lebanon and Kuwait,” he said. “Furthermore, SADAFCO has a proven track record of growth and profitability and significant cost savings are being achieved through the consolidation of manufacturing facilities to two locations in Jeddah and Dammam, rebalancing of equipment for optimal usage and in the fine tuning of manufacturing processes,” said Mr Marzouki.
