RIYADH, 8 March 2006 — Al-Kifah Building Materials Company Ltd. is offering its shares for public offering next year and has appointed the Saudi Hollandi Bank (SHB) as its financial advisor and arranger.
The IPO is expected to take place in the first months of 2007 contingent upon the approval of the Capital Market Authority and the Ministry of Commerce and Industry.
“Our decision to apply for public listing is driven by our strategy to broaden and strengthen the company’s shareholder base and access the capital market to fund our expansion strategy,” said the Al-Kifah Chairman Sulaiman Al-Afaliq.
“A successful IPO will reflect well on the company’s structure and competitive position. We intend to leverage our industry relationships to achieve superior returns for our shareholders.”
Commenting on the amount the company intends to offer in the IPO, Al-Afaliq said it was too early to specify the exact amount, saying that according to regulations of the Ministry of Commerce and Industry any company offering its shares for IPO has to offer 30 percent of its capital.
“What I can say is that it will be between SR1 to SR2 billion,” he noted.
The agreement was signed yesterday in an official ceremony held in the capital. Al-Afaliq and Giel-Jan van der Tol, managing director of the SHB, attended the signing ceremony.
Also present at the signing ceremony here were Abdullah Al-Shaikh, general manager of corporate banking group from SHB, and Saleh Al-Afaliq, vice chairman of Al-Kifah.
Al-Shaikh said it would be unnecessary to restructure the company for the IPO.
He said that it usually takes up to six months for a bank to assess whether the company needs restructuring or not when it offers its shares for IPO, based on the information and studies it does regarding its diversification, activities, sister companies, and other information.
Al-Kifah was established as a construction company by its founder, Hassan Al-Afaliq, in 1973. It is a family-owned company and has grown into a diversified group with business interests in various sectors, mainly the construction of concrete.
The company has nine main and small factories in the Eastern Province and Hail. It was the first company in the Middle East to build a concrete factory.
“Due to the boom in the real estate market in the Kingdom, we have had an increase of 50 percent in our income in the year 2005 alone,” said the vice-chairman of the company.
Regarding financial consulting work provided by SHB to several companies in the Kingdom, Giel-Jan van der Tol, managing director of SHB, said the bank has a competent team comprising local and foreign experts with significance experience in capital market transactions.
