JEDDAH, 10 April 2006 — A separate IPO (initial public offering) will be launched for Al-Madina Printing & Publishing Company this year or early next year, Prince Faisal Bin Salman, chairman of Saudi Research & Marketing Group (SRMG), announced yesterday.
He said 40 percent of SRMG shares on offer in the IPO were sold out on the first day of the launch.
In an interview with Al-Arabiya TV news channel, Prince Faisal spoke in detail about the group’s IPO, the first by a media organization in the Arab world, offering some 24 million shares to the public at the rate of SR46.
Speaking about the joining of the General Organization for Social Insurance (GOSI) and Pension Fund as strategic investors, he said the two organizations bought 5.62 percent of SRMG each on purely economic considerations.
“We welcome their presence as they will add new investment dimensions to the board,” said Prince Faisal.
GOSI and Pension Fund are professional investors, Prince Faisal said. “They are not speculators and are not looking for short-term profits. They have full confidence in our company’s strength and financial position,” he said.
The SRMG chief said the company’s management was not exercising any control on editorial decisions in terms of publishing news and articles.
“The editorial boards are totally separated from the management,” he explained. “The selection of news and articles is the responsibility of the editor in chief. The opinions published are of their authors, not of the company or the management.”
He said the group’s publications follow the rules of the countries where they are printed. “In Britain, for example, we follow the British publishing law,” he said.
Prince Faisal said the company was in the process of setting out an internal governing system, adding that it would be issued shortly.
“We are working with a major consultancy firm to draft a comprehensive law, because we don’t want a situation in which a businessman, after purchasing some shares of the company, tries to prevent us from publishing a news or article that criticizes a company or party in which he has some vested interest or if they go against his views. If a person has any problem he has to refer to the Saudi legal and judicial channels,” he explained.
He said the board selected a suitable time for the IPO after conducting prudent studies. He said the company completed its restructuring quickly ahead of flotation. “We were supposed to make big profits in 2003 and 2004 but we preferred to have small profits and we made big gains in 2005. We are now witnessing better growth as we posted a net first quarter profit of SR61 million compared to SR27 million during the same period last year.”
Narrating the history of the company, the chairman said it started with the publication of Arab News by Hisham and Muhammad Ali Hafiz in 1975. It was followed by Asharq Al-Awsat in 1978 and other media companies. He said SRMG was established in 1987 by the late Prince Ahmed Bin Salman.
Speaking about the company’s performance in 2005, Prince Faisal said the group made a net profit of SR181 million. “Our operating profit in 2005 was SR199 million,” he said.
The prince said that any decision to merge with any other establishment or making strategic alliance would be made only after careful studies. “Our board of directors comprises experts in both media and investment who will study all avenues carefully and any move in this direction will be announced in advance,” said Prince Faisal.
Prince Faisal underscored the group’s cooperation with Emirates Media. The Saudi Distribution Company is now distributing the publications of Emirates Media. “There are already three SRMG publications which are published in the UAE: Arab News, Asharq Al-Awsat and Al-Eqtisadiah,” he pointed out. “We are also going ahead with the plan for a printing company in the UAE in collaboration with Emirates Media. We have signed agreements for this purpose and formed a board of directors. The project will be launched within two years.”
The company has also entered into a partnership with Dubai Holding as part of a diversification drive.
Asked about plans of the company in the light of the great demand for SRMG shares, the prince said the group would go ahead with consolidating its achievements of 2005 in 2006 and prepare for the IPO of Al-Madina Company.
The prince said the group would start expanding in areas other than print media “only after separate studies have been made.”
The SRMG chief ruled out any merger with MBC. He explained that there was $180 million earmarked for TV advertisement in the Arab world and 85 percent of it was divided among five channels, though there are over 200 Arabic channels.
He also said there was no plan to shift the headquarters of any publications, adding that the group also plans niche publications in fields such as construction, insurance and health as the future of print media lies in specializations.