Zahrat Al Waha IPO begins today

13/08/2017 Argaam Special

The first phase of Zahrat Al Waha for Trading Co.’s initial public offering (IPO) starts on Sunday and will run through August 20, with 900,000 shares on offer to retail investors at a price of SAR 51 per share which was determined through the book building process.

 

The IPO is the first to take place this year in Saudi Arabia and will offer 4.5 million shares, or 30 percent, of the company’s capital. Of the total issuance, 80 percent of shares is allocated to institutional investors and 20 percent to retail.

 

During the book building process, shares allocated for institutions and mutual funds were 1.2 times oversubscribed.

 

Last June, The Capital Market Authority (CMA) has approved the prospectus for Zahrat Al Waha for Trading Company’s initial public offering on the Saudi Stock Market, Argaam reported.

 

 In 2003, Zahrat Al waha was established in Riyadh as an individual institution owned by Ahmed Al Theyab with SAR 25 million in capital.

 

In 2015 it was converted to a limited liability company with a total capital of SAR 50 million which was then changed to a closed joint stock company in 2016 with SAR 80 million in capital.

 

The company has raised its capital many times since inception to reach SAR 150 million.

 

 Zahrat Al Waha is engaged in factory building and maintenance, manufacturing industries, building and construction, money services, information technology, gas and water, social responsibility, agriculture and fishing as well as mining and petrol. It currently has four branches.

 

In 2016, the company’s domestic market share of plastic water bottles reached 37.6 percent while market share of plastic bottle caps reached 21.8 percent.

 

Company Profile

Stock market

Saudi Stock Exchange (Tadawul)

Company’s core business

Factory building and maintenance, manufacturing industries, building and construction, money services, information technology, gas and water, social responsibility, agriculture and fishing as well as mining and petrol.

Company’s status

Active

Company’s capital

SAR 150 mln

 

Products & Clients

Raw materials

Uses polyethylene terephthalate (PET) and high intensity polyethylene (HIPE). SABIC is main supplier

Net profit

Profits are seasonal, rises during summer and drops in winter

Major clients

Nova Water and Hana Water which account for over 36% and 27% of company’s sales respectively

Production capacity

Has 21 production line producing 7 billion pet polyforms in 15 different sizes per year and produces 6 billion plastic caps annually

Future plans

It currently has no significant new products or activities

 

IPO Details

IPO Percentage

30%

Number of retail investors IPO shares

0.9 mln shares

Retail Investors IPO shares percentage

20% of total IPO shares

Issuance price

SAR 51 /share

Size of retail investors issue

SAR 45.9 mln

Eligible subscribers

Saudi citizens

IPO date

August 13 to August 20, 2017

IPO minimum

10 shares

IPO maximum

250,000 shares

Allocation

August 27, 2017

Surplus payment

August 27, 2017

 

Additional Information

Financial Advisor, lead manager and underwriter

Banque Saudi Fransi

Receiving banks

National Commercial Bank, Banque Saudi Fransi, SAMBA and Riyad Bank

Use of IPO proceeds

Will be paid to selling shareholder after deduction SAR 17 million IPO fees. The company won’t receive any amount of IPO proceeds.

 

Major Shareholders

Owners

Shares before IPO (mln)

Stake % before IPO

Shares after IPO (mln)

Stake% after IPO

Ahmed Hamoud Al Theyab

14.85

99%

10.35

69%

Rakan Ahmed Hamoud Al Theyab

0.15

1%

0.15

1%

Public

--

--

4.50

30%

Total

15.00

100%

15.00

100%

 

Recent IPOs in Saudi Market

Company

Issuance price

Number of shares issued to retail investors

Coverage ratio (retail investors)

2016

L’Azurde

37

3.87

293%

Yamamah Steel

36

4.57

479%

Saudi German Hospital

64

8.28

274%

2015

Alandalus Property

18

8.40

469%

SGS

50

22.60

339%

SACO

70

2.88

620%

MEPCO

30

6.00

473%

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