P.K. Abdul Ghafour, Arab News
Published — Saturday 6 May 2006
Last Update 6 May 2006 3:00 am
JEDDAH, 6 May 2006 — Emaar KSA, developer of the SR100-billion King Abdullah Economic City, will float 255 million shares in an initial public offering, which is scheduled to begin on May 13, Al-Eqtisadiah business daily reported yesterday. Saudi banks have stepped up preparations for the two-week-long IPO.
“The IPO for King Abdullah Economic City will be the largest in the history of a Saudi joint-stock company, considering the huge volume of shares offered for public subscription. Some 255 million shares will be available at the rate of SR10 per share without charging any premium,” one banker said.
He expected that some 10 million subscribers would turn up to buy Emaar KSA’s shares. A single investor can buy a maximum of 25,000 shares and a minimum of 50 shares. According to another source, SABB has been appointed the underwriter of the IPO.
The Ministry of Commerce and Industry is expected to license Emaar KSA, which has a capital of SR8.5 billion ($2.26 billion) by next week. The Capital Market Authority CMA) will give the approval for the IPO soon after the license is issued.
Custodian of the Two Holy Mosques King Abdullah launched the economic city project in Rabigh, about 200 km northwest of Jeddah, in December 2005. Investors in many foreign countries including China, Japan, Malaysia, Singapore, Germany, the United States, Spain, Britain, India and Pakistan have already voiced their interest in the project, the single largest private investment in Saudi Arabia.
Central to the mega city is the creation of a 2.6-million-square-meter Millennium Seaport similar in size to the world’s top 10 ports, such as Rotterdam, that would allow even the world’s largest sea vessels to drop anchor. It will have a dedicated Haj terminal that can receive over 500,000 pilgrims every season.
The Industrial District, the second component, will cover eight million square meters and represent sectors such as downstream petrochemicals, pharmaceuticals, research and development activities as well as a host of educational institutions. The Waterside Resort will serve up a mix of waterfront hotels and boutique residences.
The fourth element, the Financial Island, is conceived to become a ‘city within a city’ for financial institutions. The island will offer 500,000 square meters of office space, business hotels and a new exhibition and convention center. There will be two towers reaching up to 160 stories that offer compelling views of the surrounding city skyline.
Three residential districts form the fifth component of the project. The first district is planned to wrap itself around a town center, which will be a blend of traditional and modern. The second district will have a seaside corniche as its main theme.
The third district will be a secluded residential community set on an island on a choice water location. The sixth component is the Education Zone, which would comprise universities, schools and research and development centers.
The Saudi Arabian General Investment Authority (SAGIA) is the prime facilitator of the project. The project is jointly headed by UAE real estate giant Emaar and the Kingdom’s Aseer Company for Trade, Tourism, Industry, Agriculture, Real Estate and Construction. The Saudi Binladen Group will also be a major player in the project.
SAGIA Governor Amr Al-Dabbagh said the project would play a major role in attracting Saudi and foreign investment. He stressed that the project would help promote Saudi Arabia as an international investment destination while pushing forward the Saudi economy into a new phase of adapting international standards.
“The six components of the city will work seamlessly together to make it an important global destination. It will be a focus area for the development of both heavy and light industry, services in various sectors and bring in a greater level of local investment as well as regional and international Foreign Direct Investment into the Kingdom and thus more job opportunities for Saudi youth,” said Emaar Chairman Mohamed Ali Alabbar.