JEDDAH, 23 July 2006 — The initial public offering (IPO) of the Fawaz Abdulaziz Alhokair Group, one of the largest retail franchisers in the Kingdom and in the Middle East and North Africa (MENA) region, will open for subscription on Oct. 7. The IPO will remain open for 10 days, or until Oct. 16.
The share capital of Fawaz Abdulaziz Alhokair and Company is SR400 million ($104 million) consisting of 40 million fully paid ordinary shares with a nominal value of SR10 each. Alhokair will be offering 30 percent of its share capital — 12 million ordinary shares — through the IPO.
The share allocation has been determined at a minimum of 25 shares and a maximum of 25,000 shares.
Fawaz A. Alhokair welcomed the decision by the Saudi Capital Market Authority (CMA), which has already approved the IPO of the company.
Fawaz A. Alhokair, group chairman, said the CMA’s decision is an important milestone that will support the development of the Saudi stock market and strengthen the commercial institutions in the country.
“We are very grateful to the CMA for its decision to approve this IPO. It comes at a time when our fashion retail business is developing rapidly and gaining in strength. We believe an IPO is a natural evolution and is a way for investors to be involved in the growth of a business that is part of everyday life in the Kingdom,” Alhokair said.
HSBC and SABB are the financial advisers, lead managers and underwriters of the IPO, while Deloitte & Touche and Bakr Abulkhair & Co. are the registered auditors and reporting accountants. The legal adviser to the transaction is the Law Office of Mohammed Al-Sheikh.
Ioannis Karapatakis, managing director Global Investment Banking Advisory of HSBC Saudi Arabia Ltd., said: “This IPO is indeed another milestone for HSBC and SABB and we are very pleased and honored to be its advisers.”
For the fiscal year ended March 2006, Fawaz A. Alhokair and Co. had sales of SR1.3 billion, showing growth of 30 percent on 2004-05, with net income increasing by 41 percent to SR246 million.
The stores of Fawaz A. Alhokair and Co. sold more than 15 million items in 2005/06 and served more than 12 million customers. In the twelve months leading to April 2006 it opened 175 new stores and is on target to open a further 150 before April 2007.
Founded more than 15 years ago, the Fawaz A. Alhokair Group is one of the top 10 trading entities in the Saudi market. Specialized in retail franchising, it currently operates more than 600 outlets in the region, representing 50 top-tier international brands.
The group has become a dominant player in most of the sectors it operates in, including real estate, fashion retail, food & entertainment, hypermarkets, financial services, telecom retail and healthcare. The company has more than 6,000 employees, and is expected to expand its retail network to cross 800 stores in Saudi Arabia by 2007.
Its international brands are some of the world’s most famous and recognizable including: Zara, Massimo Dutti, Promod, Adams, Nine West, Aldo and Monsoon. It has a strong product offering across all major fashion retail and clothing segments including, adult apparel, kids and teen fashion, and footwear and accessories.
The role of Fawaz A. Alhokair Group in Saudi Arabian industry was recognized earlier this year by the Organization for Economic Cooperation and Development (OECD), which awarded the company the “2005 Investor of the Year” award for its outstanding contribution to job creation. In 2005, the group companies generated close to 4,000 jobs.
In the face of expanding population and dwindling resources, between 80 and 100 million new jobs are likely to be needed in the region between now and 2020, according to the OECD.