RIYADH, 26 October 2005 — With around 60 companies in the Kingdom either having gone through or are undergoing initial public offering (IPO), Middle East Specialized Cables (MESC) took a major step down the road of conversion into a joint stock company yesterday when it signed an agreement with Saudi Hollandi Bank and Ernst & Young appointing them as joint financial advisers for the company’s IPO of its shares on Tadawul.
At the signing ceremony held at the headquarters of SHB, Abdulaziz Al-Namlah, the majority shareholder of MESC, and Abdulelah Al-Shaikh, general manager of corporate banking group, signed the agreement on behalf of their respective organizations. MESC concluded a similar accord with Ernst & Young represented by its managing partner, Abdulaziz Al-Sowailim.
The IPO is expected in the second half of 2006 after it has been approved by the Capital Market Authority (CMA) and the Ministry of Commerce and Industry. Senior executives of the three organizations were also present.
Speaking after the signing ceremony, Al-Shaikh said: “This mandate reinforces our commitment to providing comprehensive financial advisory services to our clients. It gives us great pleasure to be signing the second mandate in this week and clearly reflects that we are now a significant player in the capital markets arena in Saudi Arabia. We have a highly competent team comprising local and foreign experts with significant experience in capital market transactions. We believe we are well-positioned to advise MESC on its IPO.” Al-Shaikh said MESC could look forward to the future with confidence, since it had gone through five expansions in a market in which it was the dominant player as the manufacturer of specialized cables. Some 30 percent of its shares would be on sale to the public once the IPO goes through. Al-Sowailim said the transaction highlighted the advantage their regional presence provides to the clients from its offices in Riyadh, Dubai and Amman to match the regional presence of MESC’s operations in support of the IPO.
On behalf of MESC, Al-Namlah said: “The IPO will provide MESC with access to the public capital markets and facilitate future fund raising through a second offering to fund its anticipated future growth. After developing and reengineering the commercial operations over the past many years, MESC is now ready for a public listing. Our company has come a long way since its inception, and a public listing will enhance our market position as a leading player in the industry,” he observed.
In response to a question from Arab News on the company’s preparedness to face competition with the Kingdom’s accession to the World Trade Organization (WTO), Al-Namlah said the fact that their company has gone through a fivefold expansion since its inception in 1992 speaks of the quality of their products. The potential was huge as the cable market in the Kingdom and the GCC is worth an estimated $ 2 billion.
Later, in a joint interview, Mark Hanson, head of corporate finance, and Tom Lind, head of structured finance & syndication (both from corporate banking group), said SHB’s high level of expertise has enabled the bank in providing comprehensive financial advisory services to their clients.