ALKHOBAR, 14 September 2005 — Saudi International Petrochemical Company (Sipchem) has announced plans for an initial public offering (IPO) with the listing of its shares on Tadawul, Saudi Arabia’s stock exchange. The IPO is primarily intended to facilitate a capital increase to finance Sipchem’s expansion projects.
Sipchem has appointed the National Commercial Bank (NCB) as financial adviser, lead manager and lead underwriter in the IPO. In a ceremony to formalize NCB’s appointment Sipchem’s President Ahmed A. Al-Ohali stated that this was “another milestone for the company.” He added that since the company’s formation in 1999, “one of the mandates from day one was to take Sipchem forward as a public company.”
NCB is of course pleased to have won the competitive bid in the Sipchem IPO. Speaking on behalf of the bank, NCB’s Deputy General Manager Abdulkareem Abu Al-Nasr emphasized that Sipchem was more than ready to make the move to IPO.
“There is no question that Sipchem has an excellent track record so far,” he advised. He added that the company had a lot of potential and the IPO would allow investors to join in the growth of the company and Saudi Arabia.
Sipchem is currently a Saudi closed joint stock company with activities in the petrochemical field. Headquartered in Riyadh under Chairman and MD Abdulaziz A. Al-Zamil, company executives work from corporate offices in Alkhobar, with all plant operations in Jubail. There were two projects in the company’s first phase of development. These joint ventures with international partners were for a 1 million MT methanol plant, International Methanol Company, which came online 50 days ahead of schedule in 2004 and a butanediol petrochemical project, Gulf Advance Chemical Industrial Co. For phase two, Sipchem is already running two months ahead of schedule on its $900 million integrated acetyls petrochemical project, which is being managed by Foster Wheeler Energy Ltd. The Acetyls Complex is expected to start production in 2008.
Sipchem’s paid-in capital is SR1,500 million ($400 million).
The company presently has 73 shareholders, all leading corporate investors from Saudi Arabia and the GCC. The announcement yesterday was only the start of the IPO process. Sipchem must first decide, based on extensive, recently completed feasibility studies, the sum needed to finance future expansion. While there is no specific time frame for the IPO, Al-Ohali stated that with aggressive action he hoped all formalities would be finalized on the offering within five months.
Further announcements on Sipchem projects are to be expected next month.
