Retail subscription for Arabian Drilling’s IPO starts today

Logo of Arabian Drilling Co. (ADC)

Retail investors will start today, Oct. 18, subscription to about 2.67 million shares of Arabian Drilling Co. (ADC), or 10% of total offered shares, at SAR 100 each, as set by the book-building process. 

The retail subscription is set to run for two days till Oct. 19.    

The Capital Market Authority (CMA) approved on June 29, 2022 the company's request to float a 30% stake, or 26.7 million shares, in an initial public offering (IPO).

The offering will consist of the following: 

- A secondary offering of 19.89% of the company's total share capital, or 17.7 million existing shares, held by The Industrialization & Energy Services Company (TAQA) and Services Petroliers Schlumberger S.A.

- An initial offering at 10.11% through issuing nine million shares.
 

Thus, the company's capital after the offering will rise from SAR 800 million (80 million shares) to SAR 890 million (89 million shares).

The company’s institutional offering, which ended last week, was 61x covered.

The value of subscription applications received during the book building process reached SAR 162 billion ($43 billion).

This will be the 11th listing on the main market this year, after East Pipes Integrated Company for Industry (Jan. 24), Scientific & Medical Equipment House Co. (Jan. 31), Elm Co. (Feb. 3), Al-Dawaa Medical Services Co. (Feb. 27), Al Masane Al Kobra Mining Co. (March 9), Nahdi Medical Co. (March 13), Saudi Home Loans Co. (March 27), Retal Urban Development Co. (June 5), Alamar Foods (July 20) and Naqi Water Co. (July 27).

Last year witnessed nine listings, including Alkhorayef Water and Power Technologies Co. (March 1), Theeb Rent a Car Co. (March 29), Tanmiah Food Co. (Aug. 4), Arabian Internet and Communications Services Co. (solutions) (Sept. 30), ACWA Power (Oct. 11), Arabian Contracting Services Co. (Nov. 15), Nayifat Finance Co. (Nov. 22), Saudi Tadawul Group (Dec. 8) and Almunajem Foods Co. (Dec. 20).  

Company Profile 

ADC is a closed joint-stock company, established as a joint venture in 1964. It is headquartered in Al-Khobar.

The company's activities include drilling of oil and natural gas fields as well as tubular and manual water wells. This is besides services related to oil and natural gas extraction (except surveying services).

It operates in two segments: onshore segment, which includes provision of drilling and related services through onshore rigs, and offshore segment, which includes provision of drilling and related services through offshore rigs.

ADC is the largest drilling rig contractor in the Kingdom in terms of the size of its available drilling rig fleet. The group’s fleet includes 45 rigs in the Kingdom and the Saudi-Kuwaiti neutral zone, 38 of which are onshore drilling rigs, and 7 offshore drilling rigs, geographically distributed as follows:

ADC has one wholly-owned subsidiary, the Arabian Offset Company Ltd, which is a limited liability company registered in the city of Al-Khobar.

Its market share (the company with its subsidiary) is estimated at 19% for onshore operations and 12% for offshore operations, which represents a combined market share of 17% for onshore and offshore operations out of the total operations available in the Kingdom and the neutral zone, which amount to 261 rigs.

The company has nine owned properties in Al-Khobar and Al-Khafji, and four others are rented.