Sadafco readies for IPO as NCCI, Almarai prepare for year-end deals

29 October 2004
Jeddah-based National Commercial Bank (NCB)has been appointed as lead manager on the initial public offering (IPO) in Saudi Dairy & Foodstuff Company (Sadafco). The Sadafco IPO will be preceded by two other offerings in dairy firm Almarai Companyand the National Company for Co-operative Insurance (NCCI). Appetite for local IPOs was underlined on 26 October when the Ettihad EtisalatIPO closed heavily oversubscribed (MEED 23:7:04).

NCB will advise Sadafco on its public offering and lead manage the transaction, which is expected to take place in the first half of 2005. Sadafco, founded in 1991 and the kingdom's second largest dairy producer after Almarai, has seven fully mechanised factories - five in Saudi Arabia and two in Egypt. The company's paid-up capital is SR 325 million ($87 million).

The Sadafco offering will be preceded by the NCCI transaction, which is now set to be launched in late November/early December, with Almarai's IPO following about four weeks later. Both transactions are being lead managed by HSBCand Saudi British Bank.

The next IPO in line will be for Al-Bilad, a new Islamic bank formed from eight local foreign exchange houses. The transaction - to be arranged by Gulf International Bank- is now scheduled for the first quarter of 2005. Other companies due to launch IPOs in 2005 include Jeddah-based National Commercial Bank, Saudi Arabian Mining Companyand The Power & Water Utilities Company for Jubail & Yanbu (Marafiq).

Under the SR 1,000 million ($267 million) Ettihad Etisalat IPO, 20 million shares were offered for purchase over a 10-day period starting from 16 October. The transaction, which was lead managed by Samba Financial Group, was significantly oversubscribed.

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