RIYADH, 9 May 2007 — Investors offered almost four times more than Saudi Kayan Petrochemical Co. was seeking to raise in its SR6.75 billion ($1.80 billion) initial public offering, an arranging bank said yesterday.
The IPO, which closed on Monday, attracted about SR32 billion of offers, Samba Financial Group Chief Executive Eisa Al-Eisa told Al-Arabiya television.
Some 3.6 million subscribers bought shares in the IPO, Eisa said.
The offering had been only 35 percent covered in the eighth day of a 10-day offer period. The offering, equivalent to 45 percent of the company’s share capital, was only open to Saudi Arabia’s 17.5 million nationals.
State-controlled Saudi Basic Industries Corp. (SABIC), which owns 35 percent of Saudi Kayan, is helping to set up the $10 billion Saudi Kayan project with Kayan Petrochemical Co. to produce base chemicals, mainly for export to Asian nations such as China and India.
The complex, which will produce ethylene, propylene and other chemicals, will be complete in 2009. Saudi Arabia’s stock index, the Arab world’s largest, had fallen 3.4 percent from Saturday to Monday as investors sold stocks to buy into the IPO, analysts said.
The biggest Gulf Arab IPO was in 2003 when the Saudi government sold a stake in Saudi Telecom Co. for $2.72 billion.
Minister of Finance Ibrahim Al-Assaf said yesterday that the IPO’s success would encourage future IPOs.
“The IPO creates optimism about the future of share offers as well as the Saudi economy,” he told reporters on the sidelines of an economy conference in Riyadh.
