Logo of Saudi Home Loans Co.
Retail investors will start today, March 27, subscription to Saudi Home Loans Co.’s (SHL) about 3 million shares, or 10% of total shares offered, at SAR 20 each, as set by the book-building process.
The Capital Market Authority (CMA) approved in December 2021 the company's request to float a 30% stake, or 30 million shares in an initial public offering (IPO).
The retail tranche subscription process will run for three days until March 29.
The company’s institutional offering, which ended last week, was 50x covered.
This will be the seventh listing on the main market in 2022, after East Pipes Integrated Company for Industry on Jan. 24, Scientific & Medical Equipment House Co. on Jan. 31, Elm Co. on Feb. 3, Al-Dawaa Medical Services Co. on Feb. 27, Al Masane Al Kobra Mining Co. (AMAK) on March 9, and Nahdi Medical Co. on March 13.
Last year witnessed nine listings, including Alkhorayef Water and Power Technologies Co. on March 1, Theeb Rent a Car Co. (March 29), Tanmiah Food Co. (Aug. 4), 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
Saudi Home Loans Company is a Saudi closed joint stock company established in 2007 and headquartered in Riyadh. The company is also licensed by the Saudi Central Bank (SAMA) to conduct real estate financing in Saudi Arabia.
The company's current capital is SAR 1 billion, divided into 100 million shares of equal value.
The company has two branches, one each in Al Khobar and Jeddah, in addition to the headquarters in Riyadh.
The branch in Al Khobar operates as a marketing center, under the license of the General Investment Authority. The Jeddah branch operates in real estate financing.
SHL is a leading Islamic real estate finance companies in Saudi Arabia, providing solutions to the retail sector under the supervision of a Shariah-controlled body of experts, to ensure the legitimacy and compliance with Islamic law.
SHL’s main business is based on the real estate finance activity for individuals, in accordance with the Real Estate and Rental Finance Law and the Finance Companies Control Law and its Implementing Regulations and related regulations and the rules and instructions issued by the competent authorities.
The company carries out and implements financing and purchasing homes, residential lands, and apartments in Saudi Arabia; financing real estate that is developed by companies working in the field of real estate development; and financing the establishment of commercial and industrial projects.
SHL’s activities also include securing and managing the transferred assets of the owners and third parties as a security. It is also entitled to sell and buy real estate for the financing purposes, for which the company was established, with the exception of Makkah and Madinah.
The company aims to boost its returns at a steady and balanced pace, which will contribute to consolidating its position and leading role in the Kingdom's real estate finance sector.
The company's future plans include developing products and services, building a large and stable customer base, developing risk management, digital transformation, and increasing brand awareness.
SHL targets different categories of retail clients, citizens as well as residents, if they obtain the necessary approvals from the relevant authorities.
It is also working on launching a self-construction product (retail and commercial financing), in addition to new products for 2022 such as mortgage in Murabaha form and a financing product for land and loan.
Company’s Properties:
SHL owns real estate proven with more than 7,000 title deeds. Title deeds are recorded as collateral for loans made to the company’s clients. The number varies from time to time based on new clients and loan payments.
Given that SHL is a mixed company, it cannot own real estate within Makkah and Madinah. Therefore, it entered into an agreement with Kingdom Installment Trading Co. (KIC).
The company entered into three lease agreements related to real estate used as its branches, as follows:
|
Lease Contracts |
||||
|
Location |
Lessor |
Date |
Term of Contract |
Annual Rent (SAR ‘000) |
|
Offices No. 203, 304, 303, 104, 103, 004 and 003 Al-Murabba Towers Building, Madarat AlMurabba District, Riyadh |
Tharwat Al-Osoul Company |
Jan. 1, 2020 |
1 year |
2288.9 |
|
Building No. 1, Showroom No. 1, 2, 3, 4, 5, Al Rehab, Jeddah |
Hessa Mohammed Al-Adl |
Dec. 29, 2013 |
4 years |
500.0 |
|
Al-Tuwairqi Tower, Showroom No. 2 |
Sukoon Real Estate Company |
Dec. 4, 2012 |
7 years |
323.4 |
|
Company Profile |
|
|
Company |
Saudi Home Loans Co. (SHL) |
|
Market |
Saudi Exchange (Tadawul) |
|
Core Activities |
Housing and real estate finance |
|
Capital |
SAR 1 bln |
|
Number of shares |
100 mln shares |
|
IPO Summary |
|
|
Issue percentage (%) |
30% |
|
Offer price |
SAR 20 |
|
Number of shares offered for retail investors |
3 mln shares, or 10% of total shares offered |
|
Qualified subscribers |
- Retail investors |
|
IPO minimum limit for retail investors |
10 shares |
|
IPO maximum limit for retail investors |
250,000 shares |
|
Retail subscription period |
3 days (March 27 to March 29) |
|
Final allocation |
March 31 |
|
Surplus refund |
April 6 |
|
Special Information |
|
|
Financial advisor, lead manager, underwriter and book runner |
Riyad Capital |
|
Receiving banks |
Riyad Bank, Al Rajhi Bank, Arab National Bank |
Arab National Bank (ANB) will be the largest shareholder in SHL following the IPO, with a 28% stake, followed by Dar Al Arkan Real Estate Development with a 10.5% stake.
|
Company Shareholders |
||||
|
Shareholders |
Before IPO |
After IPO |
||
|
Number of shares (mln shares) |
Ownership (%) |
Number of shares (mln shares) |
Ownership (%) |
|
|
Arab National Bank |
40.00 |
40% |
28.00 |
28% |
|
Dar Al Arkan |
15.00 |
15% |
10.50 |
10.5% |
|
Kingdom Installment Co. |
9.00 |
9% |
6.30 |
6.3% |
|
Yousef Al Shelash |
8.00 |
8% |
5.60 |
5.6% |
|
Hathlool bin Saleh Al hathlool |
6.00 |
6% |
4.20 |
4.2% |
|
Tareq Mohammed Al Jarallah |
6.00 |
6% |
4.20 |
4.2% |
|
IFC |
5.00 |
5% |
3.50 |
3.5% |
|
Abulatif bin Abdullah al Shelash |
5.00 |
5% |
3.50 |
3.5% |
|
Inma Almadaen Co. |
4.00 |
4% |
2.80 |
2.8% |
|
Daem Al Khaleej Co. |
2.00 |
2% |
1.40 |
1.4% |
|
Public |
-- |
-- |
30.00 |
30% |
|
Total |
100.00 |
100% |
100.00 |
100% |
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