Maaden plans shares sale

Saudi Arabian Mining Company (Maaden) is expecting to launch an initial public offering (IPO) by early 2008 at the latest, according to chief executive officer Abdullah Dabbagh.

In the $2,500 million IPO, half of the state-owned company will be privatised with 40 per cent of shares on offer to private Saudi investors and 10 per cent to be split between two pension funds.

'Almost all of the work

on the IPO is done, and we now just need to come to an arrangement with the authorities to find

the right time to go ahead,'

says Dabbagh.

'Definitely, it will be within the next six months, and I am hopeful it will be in December or January.'

He says that as many shares as possible will be offered through sharia-compliant Islamic financing, with advisers Standard Chartered Bank

and Riyadh Bank currently looking at the options. 'If we can

do all of it that way, we will,'

says Dabbagh.

The money raised through the privatisation will help to fund the company's downstream phosphate processing.

However, there will not be a separate IPO for the Maaden Phosphate Company, a joint venture between Saudi Basic Industries Corporation (Sabic) and Maaden that will take charge of the phosphate project.

Dabbagh says it is possible that Maaden would become a majority privately owned company in the future.

'The impression I had a few years ago, when we first started discussing privatisation, was that the government eventually aims to sell more of Maaden,' he says. 'But it is difficult to predict how much more or when that will happen. I think it is at least 10 years away.'

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