JEDDAH, 24 November 2005 — The thriving oil and gas, as well as mining and construction sectors coupled with the buoyancy in the Saudi economy has generated a strong demand for quick and durable housing solutions.
One of the formidable enterprises offering such solutions is Red Sea Housing Services Company Ltd. (RSH), which has announced its new plans. The company has appointed Saudi Hollandi Bank (SHB) as lead underwriter and flotation manager for its initial public offering (IPO) of its shares on Tadawul.
The announcement was made at an agreement signing ceremony between RSH and SHB at the Jeddah Hilton on Tuesday night. Jamal Dabbagh, general manager of RSH and a director of Dabbagh Group, the parent company of RSH, and SHB Chairman Suleiman Al-Suhaimi signed the deal in the presence of SHB’s Corporate Finance Head Mark Hanson and SHB’s Western Region General Manager Tahir Al-Dabbagh. Also present were Dabbagh Group’s Chief Financial Officer M.H. Jazeel, Ribal Mehio, vice president of Swicorp, financial advisor to RSH.
The IPO is expected to take place in the first half of 2006, contingent upon the approval of the Capital Market Authority (CMA) and the Ministry of Commerce & Industry. RSH intends to offer 30 percent of its shares to the public.
“RSH’s decision to pursue a public offering is driven by strong demand for its quick and durable housing solutions in the thriving oil and gas, mining and construction sectors,” Jamal Dabbagh told a press conference.
“Our activities are focused on the most valuable and high growth market segments in the Middle East, Africa, and Asia, and high oil prices and demographic trends in the region are likely to continue stimulating demand for RSH’s products and services in the years to come,” he said.
Emphasizing the company’s strategy of continued growth, Jamal Dabbagh said: “We’ve achieved a position of market leadership and professional excellence, and we intend to use our industry relationships to continue to strengthen our market position.”
RSH claims to have successfully completed projects in more than 35 countries over the last 25 years, he said, adding that the IPO is intended to broaden and strengthen RSH’s shareholder base and allow the company to access the public capital markets to fund its expansion strategy.
RSH, which reported a turnover of SR422 million and net profits of SR98 million during its last financial year ending March 2005, is the first Dabbagh Group company to seek a public listing and offer its shares to Saudi investors.
“The regulatory framework governing capital markets in the Kingdom encourages only credible and well-managed companies to consider a public offering, further protecting the interests of the investing public,” Jamal Dabbagh said.
“RSH’s decision to appoint SHB as the lead underwriter and flotation manager is a reflection of the excellent relationship we have with the company as well as the management’s confidence in our capabilities,” Hanson said.
“We at SHB only work with companies which we feel have the strategic vision and financial and operational strength to go public,” said Tahir Al-Dabbagh.
“This mandate reinforces our commitment to providing comprehensive financial advisory services to our clients and strengthens our position as a significant player in the capital markets arena in the Kingdom,” said Al-Suhaimi.