EEC to float SR2.55b IPO

DUBAI — Emaar the Economic City (EEC), a consortium headed by global real estate major Emaar Properties PJSC and a number of high profile investors from Saudi Arabia, will launch an intial public offering (IPO) for a ten day period from July 22-August 2, to raise SR2.55 billion to finance the SR100 billion (Dh97.93 billion) King Abdullah Economic City project.

By Moushumi Das Chaudhury

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Published: Wed 19 Jul 2006, 10:30 AM

Last updated: Sat 4 Apr 2015, 3:12 PM

This was announced yesterday by Emaar Properties as the prospectus has been unveiled in advance of the IPO. The share capital of EEC is SR8,500 million consisting of 850 million shares with a nominal value of SR10 each. EEC will be offering 30 per cent of this equity — 255 million shares — through the IPO at a nominal face value of SR 10 each, thereby raising a total of SR2.55 billion.

The IPO is approved by the Capital Markets Authority (CMA) of Saudi Arabia. According to the prospectus, the net proceeds from the offering will be used by EEC to finance its real estate development operations and to pay land dues. Led by Emaar, a group of giant Saudi and UAE companies have been formed to facilitate investments for the project. The group includes companies such as Aseer Company for Trade, Tourism, Industry, Agriculture, Real Estate and Construction, as well as Saudi Binladen Group.

As real estate is one of the Kingdom's fastest growing sectors, this project offers a huge potential for foreign investment. The King Abdullah City (KAEC) is the single largest mixed-use development project ever undertaken in the Gulf region with an Industrial district and a Financial Island. The Industrial District will cover 8 million square metres and will fulfill the requirements of a range of manufacturers — small, medium and large scale industry. They will represent sectors such as downstream petrochemicals, pharmaceuticals, research and development activities as well as a host of educational institutions. The Financial Island will offer 500,000 square metres of office space for the leading international and regional financial entities, business hotels and a new exhibition and convention centre. Up to 60,000 professionals will operate from the Financial Island on a daily basis.

Mohamed Ali Alabbar, chairman of EEC said: “A six-zone development, KAEC ushers in a new era of prosperity to the Kingdom. By integrating a world-class seaport, industrial district, financial island, educational zone, resorts and residential areas, KAEC perfectly complements the Kingdom's on-going growth thrust. These components are all key economic sectors that will catalyse foreign investment inflow and boost commerce and industry."

He also added: “KAEC will be a shining example for Saudi Arabia's transformation into a global economic powerhouse. It will further consolidate the Kingdom's position as the Middle East's largest economy."

The IPO is underwritten with Saudi British Bank (SABB) acting as lead underwriters and Riyad Bank and The National Commercial Bank acting as sub-underwriters.

HSBC are also the exclusive financial advisers of the IPO and SABB is the lead manager.

KPMG Al Fozan & Bannaga are the registered auditors and reporting accountants, while Baker & McKenzie are the legal advisers.

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