JEDDAH, 16 May 2006 — The Ministry of Commerce and Industry has licensed Emaar Economic City as a Saudi shareholding company, a step required before the company’s can float its shares on the Saudi stock market.
Emaar KSA is the developer of the SR100-billion King Abdullah Economic City being built in Rabigh, about 200 km northwest of Jeddah. Some banks have speculated earlier in the month that 255 million shares will be floated in an initial public offering, the largest in the history of a Saudi joint-stock company.
The ministry has licensed the company with a capital of SR8.5 billion divided into 850 million shares with a value of SR10 per share. The founders have subscribed 595 million shares representing 70 percent of the capital while 255 million shares will be floated for a public subscription. The Capital Market Authority (CMA) has yet to approve the move. The company will be based in Jeddah. The Saudi division of the company will have a five-member board appointed by the regular general assembly for five years. Emaar specializes in major real estate projects.
Custodian of the Two Holy Mosques King Abdullah launched the economic city project in Rabigh in December 2005. Foreign investors from China, Japan, Malaysia, Singapore, Germany, the United States, Spain, Britain, India and Pakistan have already voiced their interest in the project, the single largest private investment in Saudi Arabia.
Central to the mega city is the creation of a 2.6-million-square-meter Millennium Seaport similar in size to the world’s top 10 ports, such as Rotterdam, that would allow even the world’s largest sea vessels to drop anchor. It will have a dedicated Haj terminal that can receive over 500,000 pilgrims every season. The Industrial District, the second component, will cover eight million square meters and represent sectors such as downstream petrochemicals, pharmaceuticals, research and development activities as well as a host of educational institutions. The Waterside Resort will serve up a mix of waterfront hotels and boutique residences.
The fourth element, the Financial Island, is conceived to become a “city within a city” for financial institutions. The island will offer 500,000 square meters of office space, business hotels and a new exhibition and convention center. There will be two towers reaching up to 160 stories that offer compelling views of the surrounding city skyline.
Three residential districts form the fifth component of the project. The first district is planned to wrap itself around a town center, which will be a blend of traditional and modern. The second district will have a seaside corniche as its main theme.
The third district will be a secluded residential community set on an island on a choice water location. The sixth component is the Education Zone, which would comprise universities, schools and research and development centers.
The Saudi Arabian General Investment Authority (SAGIA) is the prime facilitator of the project. Emaar, based in the UAE, and the Kingdom’s Aseer Company for Trade and Tourism, jointly heads the project. The Saudi Bin Laden Group will also be a major contractor in the project.
