JEDDAH, 28 April 2005 — The first day open to subscription for shares in the giant Saudi Dairy and Foodstuff Company (SADAFCO) saw an unprecedented rush by the Saudi public to subscribe. With a relatively low entry level of just ten shares, the latest IPO on the Saudi market attracted large numbers of small investors who snapped up the stock issue.
Fifty three percent of the shares available for public purchase, 1.95 million shares out of its total 6.5 million existing shares, sold before the close of business.
A spokesman for the lead bank handling the IPO, the National Commercial Bank (NCB), confirmed that 81,560 subscribers applied for Shares, paying a total of SR243,906,000 for slightly over half the shares on offer.
The bank also confirmed that it has distributed 2 million subscription forms to all participating banks, Al-Rajhi Banking and Investment Corp., Samba Financial Group, Banque Saudi Fransi and NCB — and subscribers have until May 4 to return them to subscribe for shares.
SADAFCO has offered 1,950,000 shares representing 30 percent of the company’s authorized capital, at the price of SR260 per share. Ten percent of shares have been allocated to banks and financial institutions whilst the remainder is for the Saudi public.
The launch of the IPO gives SADAFCO more financial flexibility, an enhanced ability to raise capital in the future and a greater feasibility and transparency in the public eye.