JEDDAH, 23 February 2006 — Arriyadh Development Co. (Ardco) is planning to increase its capital by SR1 billion ($260 million) in an initial public offering (IPO). Ardco appointed Samba Financial Group as the company’s financial adviser and the IPO manager for the capital increase. The deal was signed in Riyadh yesterday.
Ardco said that it will launch the IPO as soon as it receives the approval from proper authorities in the Kingdom.
Following this announcement, Ardco’s share price jumped in yesterday’s trading to a record high of SR665, the highest in the last 52 weeks. The signing of the agreement took place in the morning yesterday; during the opening session of the stock market. At 10 a.m., the opening time of the Saudi stock market, Ardco’s share opened at SR604 and it kept climbing until it hit the SR665 mark between the opening time and noon.
The share price slipped later to SR600, marking the lowest price in yesterday’s trading minutes before the market closing in the morning. The share rebounded to the SR640 level at the end of the morning session. This reflected the reaction of the investors to the company’s capital increase news.
The share price continued to surge in the evening trading session after many investors became aware of the news, which was posted at the Saudi stock market’s (Tadawul) website. Ardco’s share went down slightly afterward and it closed at SR643.
Ardco reported last month that its stockholders equity rose from SR1.28 billion in 2004 to SR1.35 billion in 2005, reflecting an increase of 5.46 percent.
Dr. Khalid Abdullah Al-Deghaither, general manager of Ardco, said that the increase in the stockholders’ equity resulted in an increase of 5 percent in the company’s return on equity (ROE), to become SR67 in 2005. The company distributed SR2.5 per share as dividends for 2005, this equals 5 percent of the share price. Ardco also reported that its net profit for 2005 was SR61.7 million compared to SR42.6 million in 2004.
Ardco launched in 1994 with a capital of SR1 billion represented by 20 million shares bearing a face value of SR50 per share.