RIYADH, 3 April 2006 — Saudi Research & Marketing Group (SRMG) offers 24 million shares at the rate of SR46 each for public subscription in a major IPO (initial public offering) that begins on April 8, according to Azzam M. Al-Dakhil, the group’s executive vice president.
He said SRMG was the first company to go public after the recent decision taken by the Capital Market Authority (CMA) splitting the nominal share value from SR50 to SR10 per share in order to boost stock market liquidity.
“The value of an SRMG share is now SR46 after the share split and after adding the premium,” Al-Dakhil told Al-Arabiya news channel.
Earlier the price was set at SR230 per share, including the premium, he explained. A single buyer can purchase a maximum of 25,000 shares and a minimum of 50 shares.
“Our company has been following Shariah principles in all of its business transactions and activities,” Al-Dakhil said, adding that it would continue the same policy in the future. The company has sponsored a number of seminars on Islamic banking, he pointed out.
Al-Dakhil, who is managing director of Saudi Research & Publishing Company, disclosed plans to print Arriyadiah sports newspaper in Germany beginning June 1, 2006 to provide good coverage to the Saudi team’s participation in the World Cup. The paper will be distributed in all German cities that host World Cup matches.
Speaking about the UAE edition of Arab News, he said it was planned in line with the company’s strategy to expand to other markets in the region.
“We have noticed that Gulf markets are in need of an English daily that will meet the desire of all groups of people,” Al-Dakhil said. “The Arab News Gulf edition will bring them together in a single newspaper.”
Al-Dakhil emphasized the company’s strong position as a market leader thanks to its long-standing experience in the industry and outstanding publications such as Asharq Al-Awsat, Arab News and Al-Eqtisadiah newspapers.
The SRMG, the largest publishing house in the Arab world, boasts of 15 publications in Arabic, English, Urdu and Malayalam.
The IPO will be managed by the Samba Financial Group, which will also act as its financial adviser. Eissa Al-Eissa, the managing director and CEO of Samba, expected big demand for SRMG shares in view of the group’s track record and status as a leading publishing organization in the region and its robust performance.
“Samba is keen on employing its expertise and potential to provide an ideal environment to conduct the IPO maintaining the highest values and transparency to succeed this experiment which is considered the first IPO of a media group in the Arab world,” Al-Eissa said.
SRMG posted a record net profit of SR181.4 million last year, 290 percent more than the SR46.5 million profit registered in 2004.
“Last year’s performance was the best in the company’s history. There was a 12-percent increase, or SR113.6 million in sales, compared to 2004 with total sales of SR1.063 billion,” the company said in a statement.
The group’s board of directors has decided to increase the company’s capital in two phases from SR600 million to SR800 million by transferring from 2005 reserves and profits.