Saudi energy minister says Aramco IPO could still happen in 2018

Saudi Arabian Energy Minister Khalid Al-Falih. (Reuters)
Updated 04 April 2018
0

Saudi energy minister says Aramco IPO could still happen in 2018

WASHINGTON: Saudi Arabia may still move forward with an initial public offering (IPO) for state oil company Saudi Aramco on an international exchange such as London or New York in the second half of 2018, despite previously raising doubts it could be delayed to next year, Saudi Energy Minister Khalid Al-Falih said on Thursday.
Falih told Reuters in an interview in Washington the oil giant could be floated either domestically or internationally late this year. New York is still in the running for the IPO but Saudi officials still need to weigh the risk of potential “frivolous lawsuits” in its final decision.
“We have prepared all documentation to be ready to do both domestic and international listings,” Falih said. “We have not closed the door on 2018.” Saudi Arabia is planning to list up to 5 percent of Saudi Aramco in an initial public offering that could value it at up to $2 trillion and make it the world’s biggest oil company by market capitalization.
Falih said officials have prepared documentation to be ready to do both a domestic and an international listing.
Despite comments he made earlier this month that Aramco was too important to risk listing in the United States because of litigation concerns, such as existing lawsuits against rival oil companies for their role in climate change, he said New York is still in the running for the IPO.
“We have concerns obviously Aramco is too big and too valuable and too important and we could be potentially at risk from some frivolous lawsuits and litigation that we have to consider in our final decision,” he said.
Legal challenges could arise from a US law that would allow US victims of militant attacks to sue foreign governments for compensation.


NMC Health’s $450 million bond to boost Saudi expansion

Updated 13 min 32 sec ago
0

NMC Health’s $450 million bond to boost Saudi expansion

  • The new capital structure — which will feature a mixture of unsecured bank and bond financing — will aid the company’s continued growth into Saudi Arabia.
  • The company first secured a foothold in the Kingdom in 2016 after acquiring a 70 percent stake in As Salama Hospital in Al-Khobar.

LONDON: The UAE-based private health care operator NMC Health has launched a $450 million senior unsecured guaranteed bond to help pay off an existing $1 billion bridge facility and support its expansion plans into Saudi Arabia.

The earlier bridging loan was part of the $2 billion capital structure refinancing put in place at the start of the year, the company said.

The bond is due in 2025 and is convertible into ordinary shares. JP Morgan is the sole bookrunner on the issuance. Bonds will have a fixed coupon rate of 1.875 percent, paid semi-annually.

The new capital structure — which will feature a mixture of unsecured bank and bond financing — will aid the company’s continued growth into Saudi Arabia, with NMC having been one of the first private health care providers to capitalize on the Saudi government’s health care privatization plans.

The company first secured a foothold in the Kingdom in 2016 after acquiring a 70 percent stake in As Salama Hospital in Al-Khobar.

Since then, NMC won regulatory approval last September for a new long-term care facility, the Chronic Care Specialty Medical Center, in Jeddah. It is though to be the first greenfield medical facility in the Kingdom to be set up by a non-Saudi company.

Earlier this year, NMC said it acquired an 80 percent stake in the Riyadh-based Al-Salam Medical Group.

NMC’s acquisition-led expansion strategy aims to ensure the company retains its recently-won place on London’s FTSE 100 index. It was one of the first Middle Eastern companies to join the index when it qualified last September. It first listed on the London Stock Exchange in 2012.

The company posted strong growth in the last year, reporting $209.3 million in net profit for 2017, an increase of 38.2 percent on the previous year. The company paid out a total of $641 million in acquisitions last year.

“2017 proved to be a year of tremendous achievements for NMC,” said the firm’s chief executive Prasanth Manghat, in a statement in March.

NMC also secured secured its first public ratings of BB+ with a stable outlook from S&P on April 20, while Moody’s gave the firm rating of Ba1 with a stable outlook on April 20, 2018. The bonds are not expected to be rated.

“The company continues to strive to meet self-imposed standards that are higher when compared to what is expected of it by various regulators. This approach supports in turn its resilient business model, loyal customer base, strong brand recognition and market leading position,” according to a statement from Moody’s Investors Service.

Investors are so far reacting favorably to NMC’s strategy, with the company closing at a record high on April 20, according to Bloomberg reports, with a market value of $10.8 billion.

The company is now one of 24 equities in the region to have achieved a market capitalization of more than $10 billion, the report said.

Healthcare is seen as a lucrative sector in the Gulf due to its relatively wealthy population becoming increasingly at risk of problems related to obesity and diseases such as type 2 diabetes.