Riyadh, Asharq Al-Awsat- The initial public offering (IPO) of Emaar the Economic City (EEC), which has been heavily over-subscribed since it opened on July 22, 2006, will close on August 2, 2006.
EEC, a consortium headed by global real estate major Emaar Properties PJSC and a number of high profile investors from Saudi Arabia, offers a total of 255 million shares at a nominal value of SR10 each. The fully underwritten IPO is open only for Saudi nationals.
As at the end of the eighth day of subscription, 2,313,005 applications were received from 8,426,322 subscribers, with the amount subscribed already at SR6,186,235,500.
Net proceeds from the offering will be used by EEC to finance the largest single largest private sector initiative in Saudi Arabia, the SR100 billion (US$26.6 billion) King Abdullah Economic City (KAEC). Saudi Arabian General Investment Authority (SAGIA), the body responsible for inward investments to the Kingdom, is the prime facilitator of KAEC.
“King Abdullah Economic City marks the first time that the private sector is contributing heavily to a socio-economic project of this nature,” said Mr Nidal Jamjoom, Chief Executive Officer, EEC. “The overwhelming response of the public to the IPO underscores their trust in the project, which will ensure a new era of economic prosperity for the Kingdom.”
The IPO is fully underwritten with SABB acting as lead underwriters and Riyad Bank and NCB acting as sub-underwriters. HSBC are the exclusive financial advisors on the IPO with SABB appointed as 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 sprawl over a greenfield site of 55 million sq m. The City will undertake mixed-use developments in six components: a modern world-class seaport, industrial district, financial island, educational and healthcare zone, resorts and the residential area. The overall project will be completed in stages, with the first batch of commercial houses and residents expected to take possession within 30 to 36 months.