The pricing of shares in Rabigh Refining & Petrochemical Company (PetroRabigh) is expected to be announced by the end of 2007, although uncertainty remains over whether the shares will be priced at a par value of SR10 ($2.68). Toshiki Matsumura, chief financial officer of PetroRabigh, declined to comment on pricing. “The nominal price is SR10 but we have not announced the subscription price yet,” he says.
PetroRabigh is a joint venture of Saudi Aramco and Japan’s Sumitomo Chemical Company. It will stage an initial public offering (IPO) of 219 million shares from 5 January to 12 January.
The offering is equivalent to 25 per cent of the company. It will only be open to local investors, which is common with IPOs in the kingdom.
Abdul Rahman al-Tuwaijri, chairman of the Capital Market Authority, said in early December that foreign investors would be able to subscribe to IPOs in Saudi Arabia in future through domestic funds. However, he did not give a timeframe.
“This would be a major change,” says Khan Zahid, chief economist at Riyad Bank. “Foreigners cannot get into IPOs. But it is a halfway step as foreigners would only be able to participate through a mutual fund set up to target IPOs exclusively.”
IPOs have been seen as a means to distribute the kingdom’s oil wealth to the general public.
Currently, foreign investors can invest in the Saudia Arabian stock market through mutual funds but are not permitted to subscribe to IPOs.