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Alternative Subscription Channels Boost Emaar the Economic City IPO - ASHARQ AL-AWSAT English Archive
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Riyadh, Asharq Al-Awsat- The initial public offering (IPO) of Emaar the Economic City (EEC), heavily oversubscribed even before its stipulated ten-day period, has benefited from investors utilizing alternative modes of subscription including automatic teller machines (ATMs), Internet and tele-banking.

“At closing on July 29, 2006, more than 52 per cent of the applications were received through direct channels,” said Mr Nidal Jamjoom, Chief Executive Officer, EEC. “The response underpins the rising popularity of direct modes and the high level of tech awareness in the Kingdom,” he added.

The IPO, which has collected SR5,002,960,260 as of July 29 with 1,811,086 applications, is open only to Saudi nationals. “The on-line and alternative modes of application facilitated greater participation from nationals who were not physically stationed in the Kingdom,” said Mr Ioannis Karapatakis, the HSBC Managing Director, Global Investment Banking Advisory. “Direct channels are simple and hassle-free and can now be effectively tapped by other companies on similar ventures.”

EEC is a consortium headed by Emaar Properties PJSC and a number of high profile investors from Saudi Arabia. Net proceeds from the IPO will be used for developing the King Abdullah Economic City (KAEC), a SR100 billion project that will usher in a new era of economic prosperity to the Kingdom.

KAEC, to be built on a pristine location off the Red Sea in the north of Jeddah, is the single largest private sector initiative in the Kingdom. It covers a greenfield site of 55 million sq m. Saudi Arabian General Investment Authority (SAGIA), the body responsible for inward investments to the Kingdom, is the prime facilitator of KAEC.

EEC is offering 30 per cent of its equity – 255 million shares – at a nominal face value of SR10 to raise a total of SR2.55 billion. The IPO will close on August 2, 2006.

EEC appointed 11 receiving banks to ensure that investors have access to a large number of bank branches across the Kingdom to subscribe to the IPO. SABB is the lead underwriter, and Riyad Bank and National Commercial Bank are sub-underwriters. HSBC are exclusive financial advisors on the IPO and SABB is the lead manager. KPMG Al Fozan & Bannaga are the registered auditors and reporting accountants while Baker & McKenzie are the legal advisors.

King Abdullah Economic City will undertake mixed-use developments in its six components: a modern world-class seaport, industrial district, financial island, educational and healthcare zone, resorts and the residential area. Groundwork on KAEC is going full steam ahead. The structural steel work for the presentation center has been executed and installation of precast walls will be completed in a fortnight.

Asharq Al-Awsat

Asharq Al-Awsat

Asharq Al-Awsat is the world’s premier pan-Arab daily newspaper, printed simultaneously each day on four continents in 14 cities. Launched in London in 1978, Asharq Al-Awsat has established itself as the decisive publication on pan-Arab and international affairs, offering its readers in-depth analysis and exclusive editorials, as well as the most comprehensive coverage of the entire Arab world.

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