JEDDAH, (Reuters) – Almutlak Trade and Industries, a Saudi-based automotive specialist, plans to sell 30 percent of its shares to the public early next year as part of plans to expand its business, the IPO’s adviser said.
‘The plan is to have it in the first quarter of 2010 but the exact date is subject to the Capital Market Authority’s approval,’ said Faisal Alsayrafi, chief executive and managing director of Financial Transaction House Co, the lead adviser for the IPO, adding the company’s valuation had yet to be completed.
The IPO plans reflect the slow but gradual return of companies’ appetite to return to the capital markets, a trend that came to a standstill as a result of the financial crisis.
The money raised from the IPO will be taken by the existing shareholders while future expansion of the business will be funded from a capital increase, planned one year after listing, Alsayrafi said in an interview late on Tuesday.
This capital increase will be done through a rights issue to help fund a 1.5 billion riyal ($400 million) expansion programme within the next five to eight years, Almutlak’s managing director, Mohamed Al-Mutlak, told Reuters.
‘We are continuously expanding in size and activities … We are very strong in the industrial sector so we will … increase our industrial base into new products and companies through acquisition and start-ups,’ Mutlak said.
Almutlak, which on Tuesday agreed with Germany’s Continental AG to be the exclusive supplier in Saudi Arabia of Continental light trucks and truck tyres, has capital of 300 million riyals and owns six subsidiaries involved in the manufacturing of automotive supplies and trucks.
Analysts expect IPO activity to gather steam again from 2010. Four companies have listed in the Middle East in the third quarter raising $871.79 million compared with 14 IPOs raising $3.74 billion during the same period last year, Ernst & Young said in a report on Monday.