The launch date for the initial public offering (IPO) of shares in Al-Bilad Bankhas been set for 21 February and will be followed by at least two more transactions in the first quarter. Al-Bilad's IPO will be the second under the auspices of the Capital Markets Authority (CMA), formed last year to regulate the local financial market (MEED 24:12:04).
The Al-Bilad transaction will be open for two weeks until 9 March and pave the way for the establishment of the kingdom's 11th commercial bank. The fully Islamic bank has been formed by the merger of eight local foreign exchange houses and plans to raise 50 per cent of its capital, or SR 1,500 million ($400 million), from the IPO, arranged by Gulf International Bank. Industry sources say the next two IPOs in line are those of the kingdom's two largest dairy firms, Almarai Companyand Saudi Dairy & Foodstuff Company (Sadafco). The Almarai transaction will be handled by Saudi British Bank (SABB)and HSBC. It is understood that an application to launch the IPO has been submitted to the CMA. Jeddah-based National Commercial Bank (NCB)is lead managing the Sadafco deal. The transactions, which will be fully underwritten by the respective banks, are expected to receive the CMA's green light after the Al-Bilad deal. Other companies due to launch IPOs in 2005 include NCB, Saudi Arabian Mining Company (Maaden)and The Power & Water Utilities Company for Jubail & Yanbu (Marafiq). The IPOs will follow the successful launch of the share offering of National Company for Co-operative Insurance (NCCI), which closed 11.5 times oversubscribed on 4 January after a two-week subscription period. NCCI received more than 800,000 applications worth SR 15,600 million ($4,200 million) for the 70 per cent of NCCI's shares on offer at a price of SR 205 ($55) each.
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