JEDDAH, 11 June 2007 — The first day of the 10-day initial public offering (IPO) of Jabal Omar Development Company drew a huge turnout of Saudi investors flocking to banks to purchase shares yesterday. The company, with a capital of SR6.7 billion representing the total 671.4 million shares, offers 201 million shares or 30 percent of the total, to Saudis at the rate of SR10 per share and without charging any commission.
Participating banks for the IPO predicted that the demand for the shares would exceed 10 times due to the proximity of the project to the Grand Mosque. A source at Bank Albilad said the high demand for the shares would make it hard to allocate 50 shares to each applicant.
The Makkah Construction Company (MCC), Jabal Omar’s strategic partner, and other investors own the rest of the shares. A subscriber is allowed a minimum of 50 and a maximum of 10 million shares.
Abdul Rahman Faqeeh, chairman of MCC, said Jabal Omar Company was established to carry out a massive real estate project close to the Grand Mosque in Makkah, covering an area of 32,000 square meters. “The buildings in the area will have a total space of one million square meters,” he added.
“It is one of the largest real estate projects in the Arab world,” Faqeeh said.
Jabal Omar project will contribute to the development of the mosque’s side. It includes 40 residential towers to accommodate 160,000 pilgrims, prayer area for nearly 200,000 worshippers, and construction of new parking areas and a new road parallel to the Umm Al-Qura Road. “The project will change the face of Makkah,” he added.
Faqeeh said the project would take care of Jabal Omar’s topography. Hills in the area are now being flattened to start work on the project. He said the project would utilize domestic and international architectural expertise.
Faqeeh said the Jabal Omar project was the brainchild of MCC, which had spent about 17 years to give a complete picture about the project after collecting ideas of experts from within and outside the Kingdom.