Funds to be used to boost production
Saudi Arabia’s Najran Cement Company will launch an initial public offering (IPO) worth SR850m ($226.6m) on 16 April.
The company will float 85 million shares priced at SR10 per nominal share, accounting for 50 per cent of the company’s SR1.7bn paid-up capital.
The IPO is one of the conditions of the Najran Cement’s mining lease from the government. There will not be a premium on the share price as per the conditions of the mining ministry.
“The capital raised will be used for financing the front line, plus it will compensate the original shareholders for whatever they surrendered of their original shares,” says Ahmed Abduh Zugail, chief executive officer and president of Najran Cement.
The subscription period will open on 16 April and will last a week.
“I am sure it will be covered twice. The cement market has been growing for the past few months,” says Zugail.
Saudi Fransi bank is acting as advisor to Najran Cement and book-runners for the IPO.
“Our original capital was SR1.15bn. In addition we have added a new production line to the existing two lines and we are producing 7000 clinker a day, about 2.3 million tonnes of cement per annum,” says Zugail.
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