Saudi Arabia’s Al-Rajhi Steel has appointed France’s BNP Paribas to act as financial adviser on a planned initial public offering (IPO) for its $3bn steel project being developed at King Abdullah Economic City.

The UK’s HSBC has already been appointed to advise on raising debt funding for the project. The flotation is expected to be done at par value, usually about SR10 ($2.7) a share. Companies that receive a cheap gas allocation from the government are typically obliged to undergo an IPO, with shares floated at a nominal value on the Saudi Stock Exchange (Tadawul) as part of Riyadh’s policy of redistributing wealth to the population.

The timing of the IPO is still unclear, but banks are expected to be approached for debt funding of the project by mid-2012 (MEED 15:07:11).