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[2007-12-05] Rakisa plans to sell 30pc shares in $400m IPO
The developer of Saudi Arabia's $8 billion Prince Abdulaziz bin Mousaed Economic City will seek approval for a 1.5bn riyal ($400 million) initial public offering by year-end, a company executive said yesterday.
Rakisa Holding, which had planned to sell 30 per cent of its shares to the public in the first quarter, said in April it would delay the sale until May due to a Gulf stock market slump.
"There were some delays because of land ownership documentation, which still hadn't been transferred from the government," corporate communications manager Ibrahim Hashem said.
Rakisa is now finalising the prospectus and expects to submit its application in the next two weeks, Hashem said, declining to give a timeframe for the sale.
Hashem said Rakisa had reduced its capital to 5bn riyals from 7bn after the government put power supply for the city under the responsibility of Saudi Electricity Company.
Rakisa had planned to build a 2bn-riyal power plant, Hashem said.
Rakisa is leading the consortium developing the project at Hail, about 700km north of Riyadh. The development will include a new airport as well as industrial and residential areas.
US firm KBR is advising Rakisa on the construction, Hashem said.
Emaar Economic City, which is building a port and financial centre on the Red Sea coast, raised $680m last year in the first IPO by a developer of one of six new cities planned by Saudi Arabia. The cities are part of a government plan to tap the windfall from record oil prices to develop infrastructure and create jobs.
Two more cities are planning to sell shares to the public next year. Saudi Arabia's Binladin Group and Malaysia's MMC Corporation plan to sell 30pc of the jointly owned Jizan Economic City to help finance the $30bn development.
Seera City Real Estate Development Company, which is developing the Knowledge Economic City in Madina, said in October it would raise around $267m in an IPO next year.
Source: Copyright © 2007 Gulf Daily News.
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