Over the July 19-25 period, Al-Jouf will offer Saudi investors 27.9 million new shares and 37.1 million existing shares at SR10 each to raise the total number of its shares to 130 million, the listing prospectus showed.

About 55.5 percent of the IPO’s proceeds will go to founding shareholders and other investors such as KSB Capital Group, which is also acting as the financial adviser for the listing along with National Commercial Bank (NCB).

Ibrahim Al-Alwan, a senior KSB executive, said KSB’s stake would fall to 6 percent from 12 percent after the IPO.  “The remainder of the proceeds will repay a bridge loan that was taken to fund the capital expenditure and start works on the plant so that production does not get delayed. The production started around the month of May,” Alwan said.

The listing prospectus showed Al-Jouf will use SR171.5 million of the proceeds to repay debt and SR100 million to repay unspecified general costs.

In 2009, the firm obtained a SR220 million Islamic loan from NCB to mainly fund its working capital and signed this year an agreement with state-owned Saudi Industrial Development Fund for a financing worth up to SR483.5 million to be repaid over 14 installments in eight years, it said in the prospectus.

Al-Jouf has a production capacity of 1.75 million tons per year — or 5,000 tons per day — and would compete with Tabuk Cement and new entrant Northern Region Cement Co, Alwan said.  “Al-Jouf Cement will tap demand from regional markets, such as Iraq which is undergoing a huge reconstruction effort. It has already obtained cement exportation licenses,” he said.